South Africa: NEHAWU Statement On the Fruitless and Wasteful Expenditure By National Treasury

press release

The National Education, Health and Allied Workers' Union (NEHAWU) notes with serious concern the audit outcomes of the National Treasury.

The audit outcomes released by the Auditor-General, Tsakani Maluleke, reveals that National Treasury has incurred R249 million in irregular expenditure and that the delay in implementing the Integrated Financial Management System (IFMS) caused R66 million in fruitless and wasteful expenditure. Furthermore, the Auditor-general chastised Treasury for spending money outside the guidelines of existing legislation for public finances. She decried the lack of compliance to sound and prudent financial management by Treasury which is responsible for fiscal responsibility and proper use of the public purse. The majority of the irregular expenditure was as a result of non-compliance with supply chain management and contract management processes.

This is a department responsible for supporting efficient and sustainable public financial management that is fundamental to the promotion of economic development, good governance, social progress, and raising the standard of living for all South Africans. The Constitution of the Republic (Chapter 13) further mandates the National Treasury to ensure transparency, accountability and sound financial controls in the management of public finances yet it is handled by a person who fails to account for monies spent by his department and failed to be exemplary to other government departments in terms of ensuring that every cent is accounted for.

Furthermore, the Minister of Finance, Tito Mboweni, failed to submit financial statements and Treasury's annual report on time and asked for an extension from Parliament. This show the bad state that Treasury is in and further highlights Mboweni's lack of attention to details on fundamental issues.

When he took the podium to deliver the Budget Speech last year, Minister Mboweni made empty and ridiculous platitudes about "zero budgeting" and "the bloated public service", when in fact in the same year his department was to be exposed for its abject lack of compliance assurance mechanism and malfeasance.

The Minister has been leading the chorus of practicing responsible spending and good governance, however, his department is doing the direct opposite by hemorrhaging public money unnecessarily.

This is the same department that is prioritising austerity measures that have diminished the quality of service delivery and has led to mass unemployment. Moreover, the department went out of its way to refuse to implement PSCBC Resolution 1 of 2018 especially clause 3.3 which speaks to the salary increase of public servants. Treasury has become more about an instrument to feed Mboweni's ego than being about serving the people.

We call for those responsible for the fruitless, irregular, and wasteful expenditure to be held accountable including the Minister as the Accounting Authority. Now we know why the Treasury has been soft on those who waste public resources, it is because the Treasury is a culprit itself. None of the government departments, state-owned entities, and municipalities have ever faced punitive measures for not practicing financial prudence with public funds. Year after year, the Auditor-General keeps on reporting that at least about 10% of the government's budget is drained by corruption, irregular, wasteful and fruitless expenditures, however, no steps are taken by Treasury to avert this.

In this regard, we call on the President to decisively act on Minister Mboweni for his inability to manage the coffers of his department as he has a mammoth task of managing the purse of the South African government as a whole and to be exemplary and inspire confidence in the rest of government departments. If he fails to keep up with the Public Finance Management Act (PFMA), of which Treasury is responsible for enforcing its compliance by the entire state he must account to the President why he must continue to be kept in the position. We also expect the Portfolio Committee on Finance to exercise its own responsibility of ensuring that Treasury accounts for its non-compliance and malfeasance in order to show that it has the requisite teeth of exerting accountability on its laws. The decisiveness of President Ramaphosa is tested now more than ever before and as the national union will view his failure to act as a demonstration of his inability to back up his words he promised immediately after taking office as the State President.

It has been proven and now it is public knowledge that Mboweni's policy of austerity measures have not assisted in saving the South African economy and yet his department could not keep up with the same neo-liberal policy which has plunged our socio-economic into a deep crisis. It is clear that Minister Mboweni does not represent the plight of the South African people, in particular the working class and the poor in the office he is holding, hence, the President must act decisively on him. His failure to act on the Minister of Finance will subject him to the national union taking a fight straight to his door and we wish to warn him to be prepared to face the might of workers in general and public servants in particular.

NEHAWU will intensify its call for the end to austerity measures, the protection of public funds and the punishing of non-compliance to legislation of public finances by disrupting Tito's functions and meetings even to mobilise members to visit him in both his offices in Pretoria and Cape Town. With this failure we lost hope that Treasury will use the upcoming budget speech to help South Africa to overcome the current economic challenges which have been exacerbated by the outbreak of the novel coronavirus which has caused unprecedented damages to the economy coupled with unimaginable job losses.

Lastly, we call on President Ramaphosa to instruct Minister Mboweni to use the forthcoming budget to implement the last leg of the current public wage agreement as government cannot continue to rely on workers to continuously provide service delivery while their salary increase is not yet paid. Majority of these workers are frontline workers who are serving as our first line of defence against COVID-19 and have been subjected to a life of poverty by our uncaring government.

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