The MEC for Finance in KwaZulu-Natal (KZN), Belinda Scott has vowed to keep an eagle eye on the budget expenditures in order to ensure that the province is on a sound financial trajectory.
She said this during the presentation of her departmental 2014/15 budget of R878 315 million at the Legislature today wherein the adverse effects of the shrinking world economy coupled with the continuous reduction of the provinces’ equitable share were mentioned as aggravating circumstances.
Explaining the role the Public Finance, a business unit within KZN Treasury responsible for overall budget performance in the province, she said “Public Finance will continue with its robust monthly expenditure and revenue analysis and the monthly presentation of the provincial budget performance and the provincial cash situation to the Executive. Where there are signs of in-year pressures, these will be attended to immediately so that KZN remains on its stable trajectory”.
Scott said over the last few years, Treasury introduced reforms to facilitate the implementation of financial management controls by the public entities, ensuring compliance with the Public Finance Management Act (PFMA) and other relevant legislation to ultimately guarantee that the province obtains value for money.
“Treasury will make refinements to reporting templates with the focus on improved financial prudence. To obtain best value for money, Treasury will assess all public entities and make recommendations on their revenue collection strategies, service delivery models and the funding assigned to them. The department will also research and recommend appropriate board remuneration rates of public entity boards,” said Scott.
To address the impact caused by the world’s economic turbulences, Scott committed herself to ensuring a robust focus on the province’s own-revenue generation.
“Treasury will intensify its efforts to expand the provincial revenue base. In particular, the close ties with the Department of Health will boost its revenue collection potential with regard to patient fees. Strategic interventions will also be explored with Transport to minimise the loss of motor vehicle licensing revenue to neighbouring provinces. Also, the KZN Gaming and Betting Board and the KZN Liquor Authority are expected to increase their revenue collections significantly through a number of expansive initiatives, while ensuring that their social responsibilities are not compromised,” concluded Scott.
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Other budget highlights
One can only spend the allocated provincial funds wisely if there is a collective culture of responsible spending in departments, public entities and municipalities. Value for money should be paramount. Therefore, each and every public institution and public official must abide by the laws and regulations governing good governance and prudent financial management.
One of the major risk areas facing departments and public entities is the quantum of irregular expenditure. Although substantial work has been done by Provincial Treasury to investigate some of these cases, the sheer volume of transgressions makes this a daunting task. New cases are identified by the Auditor General every year and some departments fail to provide sufficient motivation and explanations for evaluation to the Provincial Treasury team. The good news is that the executive has supported the consideration of a first charge against the budgets of the defaulting departments in these instances.
Provincial Treasury has appointed a service provider to develop an e-Procurement tool which will assist in limiting instances of fraud and corruption within Supply Chain Management (SCM) processes, which should be up and running in the latter part of 2015. SCM is an area of increasing concern and is the main contributor to irregular expenditure.
Even though the special task team has completed its initial mandate on the reduction in government debt to municipalities, it has become clear that the situation should be carefully monitored to ensure that arrears in certain areas do not occur again.
The original provincial arrear debt of R466 million has been reduced to R86 million. The majority of municipal debt remaining relates to rates levied against Human Settlements and services to certain Section 21 schools. The task team is working with the responsible departments to resolve these challenges.
The increasing demand for forensic investigation by departments, public entities and municipalities has required of us to expand our capacity. In addition we are also reviewing our processes to enable speedy and swift investigations. A Fraud Case Management System will be used, among others, to record, consolidate and follow-up on all forensics investigations that are taking place at all levels of the provincial administration - irrespective of whether the investigation is being conducted by Provincial Treasury or by the institution itself.
“Our role remains one of support through guidance, enabling, monitoring and assisting. We want every citizen to be a first-class citizen, every citizen a producer, nation builder and valued contributor, and every citizen a peacemaker. We will work around the clock to ensure that public funds are spent wisely, transparently and towards the improvement of the lives of all our people. We have hatched as a democracy. Let us strengthen our wings and fly higher and further,” concluded MEC Scott.
