The Democratic Alliance questions the double standards being imposed
by the provincial Treasury. One standard must be applied when it comes
to the management of public funds.

We welcome the fact that the acting head of the provincial treasury
has publicly taken municipalities to task for irregular expenditure.
The Auditor-General report for 2013/14 shows that Northern Cape
municipalities had misused R1.9 billion. We obviously cannot afford
this, especially not when municipal debt to Eskom, the Water Board and
other service providers has threatened a discontinuation of essential
services.

But we are concerned that the acting head of the provincial treasury
has also repeatedly said that treasury cannot hold departments to
account for unauthorized, irregular, fruitless and wasteful
expenditure. His most recent utterance was at a National Council of
Provinces meeting, where Mr. Gumbo expressed the view that treasury is
powerless to act against officials in departments who allow irregular,
unauthorized, fruitless and wasteful expenditure to occur. This
includes slow payments to service providers, which has allowed an
accumulation of unpaid debt owed by the provincial departments.

Why are municipalities being scolded when departments, especially
Health and Education, are allowed to commit the same financial sins on
an even greater scale?

At the end of the 2015 financial year, the provincial government owed
R1 billion in accruals. This constitutes 5.1% of the provincial
budget. Overall, R689 million has been owed for more than thirty days.
The cash surplus of R295 million is entirely inadequate to cover the
accruals. Departments are flouting Treasury Regulations, which clearly
state that outstanding accounts must be settled within 30 days, with
impunity. Health alone owed R145 million to suppliers who are yet to
be paid.

Treasury must be more than a mere conduit through which funds are
distributed to provincial departments. Section 18 of the Public
Finance Management Act obliges Treasury to exercise control over the
provincial budget and to promote transparency in financial management.
The same standard that applies to municipalities, must apply to
departments.

We call on the premier to appoint a permanent head to Treasury who
will share this view and who will ensure that public funds are being
spent to the benefit of the public.

 

Issued by DA