Honourable Speaker
Honourable Premier, Ms Hazel Jenkins
Members of the Executive Council (MECs)
Honourable members of the provincial legislature
Ladies and gentlemen
Comrades and friends
It gives me pleasure to present budget vote eight at the time when our people are becoming more and more excited about the prospects of the imminent 2010 FIFA World Cup to be held in our shores in at least 29 days.
Indeed we can feel it! The people of our province are also quite elated by the expected arrival of the Uruguay national team which has chosen Kimberley as its base camp. Honourable Speaker, all this is happening in our lifetime and right on our continent.
In the midst of all this excitement we cannot forget those who laboured diligently to ensure the successful hosting of the world cup. I refer to men and women whose labour was instrumental in the construction of stadiums, roads and other infrastructure related projects. We salute them and many other workers because this is the month in which we celebrate workers.
Earlier in the month we observed Workers Day and remembered the struggle waged by the working class in the liberation of our country. On 1 May the international community commemorated the historic struggles of working people throughout the world.
In the honour of all working people of the world I wish to recite the poem by the late Industrial Workers of the World songwriter Joe Hill and I quote:
"Workers of the world, awaken!
Rise in all your splendid might
Take the wealth that you are making,
It belongs to you by right.
No one will for bread be crying
We'll have freedom, love and health,
When the grand red flag is flying|
In the workers' Commonwealth".
Of course honourable members in the context of our province we also remember fellow comrades who died during the tragic bus accident at Saulsport Dam in Bethlehem in 2003. Through the budget vote we table today we wish to advance some of the ideals that they lived and struggled for.
Their deaths will serve as a constant reminder that we need to work harder to improve the living conditions of the poor and marginalised and that we dare not fail in bringing positive change to the lives of our people.
It is in this context that we table today the plans to manage and utilise the provincial resources to advance development, economic growth and fight poverty and underdevelopment.
Improving financial management
During the provincial budget speech we noted with concern that financial governance remains a challenge in the province as we are still faced with the difficulty of attracting and retaining skilled financial management personnel.
We also observed that the province is still below level three in terms of financial management capability maturity a point echoed by non compliance with many financial management prescripts.
In the face of these challenges the Provincial Treasury was tasked to intervene by, in particular capacitating financial personnel and driving the process of ensuring that the necessary structures are set up at municipalities and departments.
The first point of intervention in this respect is measures to improve management of over and under-expenditure. It cannot be overemphasised honourable speaker that failure to utilise public financial resources effectively undermines the development aspirations of government and the mandate given to us to work together to do more in terms of growing the economy, creating jobs and extending public services to all.
We alluded in the past that there were indications that we have evolving financial problems as a result of continuous overspending by the departments of Health and Education and to a lesser extent Agriculture, Land Reforms and Rural Development; a situation that if ignored or kept unresolved would threaten the future sustainability of the province and seriously compromise our social programmes.
Accordingly, central to improving management of over and under-expenditure is the need to pay more and focused attention to the departments of Health, Education and Agriculture.
Honourable members would appreciate the fact that the Departments of Health and Education collective account for over 70 percent of the total provincial budget implying that over expenditure by any of these departments' destabilises the financial situation of the province.
Accordingly, Treasury will continue to work with these departments to address any financial management challenges and most importantly to ensure that they spend within the appropriated budget.
In particular, programmes are underway to capacitate financial management personnel in the identified departments. With regard to the Department of Health were have willingly released one of our most competent budget analysts to accept a Senior Management post in the department where she will be responsible for financial management.
As part of our support to the Department of Health, during the previous financial year we seconded a seniors manager and other officials specialising in supply chain management to assist the department to improve supply chain management process and procedures. The department has since appointed their own staff in this regard and we are monitoring progress.
At the same time we cannot underscore the problem of under-expenditure. Inability to spend the allocated budget often means that service delivery is adversely affected as planned programmes have not been effectively executed. The resources lost in that particular year cannot be recovered in the next year. Thus under-expenditure is as serious as over-expenditure.
The implications of under-expenditure are particularly adverse on infrastructure grants and conditional grants. In the event that these grants are not properly spend as per submitted plans National Treasury will withdraw them and reallocate them to other provinces that spend better.
In the province we are currently running the risk of losing over R200 million of the hospital revitalisation grant due to under-spending. Accordingly, it was resolved between Treasury, Health and Public Works departments to establish a task team that would conduct proper due diligence, feasibility studies and risk assessments to ensure that projects are managed and implemented efficiently and effectively.
In the future all hospital revitalisation projects would also not be the sole responsibility of the departments of Health and Public Works only, a committee will be established consisting of Health, Public Works and Provincial Treasury to avert future under expenditure on this grant and all other major infrastructure projects in the province.
The Infrastructure Development Improvement programme phase 111 which is to be implemented in the current financial year will make provision for the deployment for the next three years in Provincial Treasury, Health, Education and Public Works technical assistants with built environment knowledge, skills and experience as part of the effort to improve infrastructure delivery.
In line with our objective to improve financial management and adhere to good corporate governance principles, a process is underway to ensure that all transfers to public entities including Trust Funds and section 21 schools are used in the most efficient, effective and economical manner to enhance transparency and accountability.
In this respect, during the 2010/11 financial year transfers to trusts, section 21 schools and boards will be monitored and audited to ensure that funds transferred to these entities are used solely for the purpose intended for.
We reflected earlier on the economic outlook and noted the job losses experienced even in the light of an economic recovery. This, Honourable Speaker, challenges all of us and particularly those responsible for managing provincial financial resources to institute measures that can contribute to faster economic growth and job creation.
The provincial Economic Summit held last year identified amongst other things the small, medium and micro-environment (SMME) development as an important intervention in dealing with the impact of the recession and creating jobs.
It was in this context that during the budget speech we noted the need for management of public finances to be used effectively to contribute to economic development and in particular to support SMME development.
Through our interaction with SMMEs in the province we have noted with concern the adverse impact that late payments from government departments has on their operations.
In order to ensure that no SMME closes shop because of unpaid bills by government departments we are working on mechanism that will allow Provincial Treasury to pay outstanding payments and recoup them from the affected department.
It is contravention of the law not to pay service providers within 30 days and punitive measures will be taken against those who fail to comply.
In addition to these measures, the Accounting Services Directorate will in the 2010/11 financial year focus on accounting issues in municipalities to improve the credibility of information, implement support plan to improve on the 2010/11 audit outcomes for departments and municipalities, and improve on monitoring the preparation of annual financial statements to ensure timely submission of accurate information.
The office of the provincial Accountant General will also focus in this financial year on consolidating the work of the Norms and Standard Directorate, by amongst other things increasing visibility in departments and municipalities by conducting more workshops and forums and redirecting resources to focus more on municipalities, and conduct research on areas of norms and standards that should be developed and rolled out.
The work on risk management will also be intensified including the development of risk mitigation action plan for key risk areas and continuous monitoring as well as provision of hands on support and capacity building to municipalities, departments and public entities with regard to risk management practices.
We are witnessing an increasing appetite by local municipalities to form private public partnerships to utilise effectively, efficiently and economically underutilised immovable assets of the municipalities.
In this regard, the chief directorate responsible for the management and advisory services in respect of public private partnership (PPP) is currently assisting two local municipalities with their PPP applications, feasibility studies and "the packaging of the PPP" of which some are at an advanced stage.
We can safely report that we seconded for the entire year one of our senior managers to the department and approached a firm of chartered accountants to assist the department at our cost. We are happy to report that our efforts are bearing fruits.
Preliminary indications are that the huge over spending that threatened provincial financial stability has been contained. The official we seconded to the department has not come back to Provincial Treasury as the department decided to employ him permanently in their department.
Honourable Speaker, during February 2009 we responded positively to the cry of the Department of Education to assist them to address negative audit reports that gave rise to the audit disclaimers opinions for two consecutive years and the budget overruns that were threatening provincial government financial stability.
Furthermore, one of the strategic administrative issues that impacts on the function and mandate of the Provincial Treasury is the strategic location of the Internal Audit Unit. This unit was previously located in the Office of the Premier and as per Executive Council (EXCO) resolution relocated to the Provincial Treasury from 1 April 2010.
As of this date the Internal Audit Unit is located in the Provincial Treasury where it will be given strategic leadership, guidance and new mandate, while it works to achieve the goal of improved audit outcomes in the province.
The capacity of the internal audit unit will be improved by adding another senior manager post together with additional audit staff, all vacant posts will be filled as part of improving capacity of the unit.
In this respect, the Department of Health and Education will each have its own audit units and audit committees focusing exclusively on them. The additional senior manager and audit staff will be responsible for all other departments. An additional audit committee will be established to support the work of the internal audit unit responsible for all other departments.
The chief executive of audit will be recruited to coordinate the work of all the three internal audit units. The audit committees will be configured to ensure proper governance and performance.
Local government support
Honourable Speaker, with the emphasis on intensifying support to the municipal financial administration, the coordination processes and means of support to municipalities has become one of the key strategic issues.
It is for this reason that in the 2010 medium term strategic framework (MTEF) period the strategic focus of the department is also to ensure that municipal finances are improved.
This is in line with the objectives of the medium term strategic framework and the Operation Clean Audits 2014. In the past we alluded to the fact that our analysis of financial management challenges in municipalities shows that problems are mainly at basic or transactional level including poor internal controls, poor quality of financial statements and non-compliance with supply chain management.
In order to ensure that the Provincial Treasury provides the most comprehensive and effective support to municipalities our approach is that support to municipalities be spread across all programmes in the department.
The coordination of this support will be driven from the office of the Head of Department. Our new approach entails collaboration with various stakeholders such as district municipalities, the Development Bank of Southern Africa (DBSA), National Treasury, Local Government Sector Education and Training Authority (LGSETA), Northern Cape South African Local Government association (SALGA), and other relevant stakeholders.
In a groundbreaking initiative, the Provincial Treasury in collaboration with district municipalities and the Development Bank of Southern Africa will train approximately 150 people on various financial management aspects of municipalities with funding from the Local Government SETA.
Recruitment to this programme will not only be limited to graduates in the field of finance but would also include graduates with potential from other fields of study. In addition, plans are afloat for the Provincial Treasury to second officials currently based in districts to struggling municipalities to provide hands on financial management support.
In addition to our provincial efforts we will also receive five financial experts to be deployed at district municipalities. They will be funded by Senza Manje programme of the Development Bank of Southern Africa for the next three years.
The other identified area of concern for municipalities Honourable Speaker is the money owed to municipalities by provincial government departments.
This situation if left unattended threatens the viability and sustainability of certain municipalities because of their dependence on rates and taxes to finance operational and service delivery requirements. Thus the department has been tasked to work on an intervention that will culminate in the eradication of municipal debts by provincial departments in the current financial year.
Sustainable resource management
An important element of work of economic analysis directorate is the analysis of the impact that the budget has on service delivery. This exercise is conducted mainly through the quarterly NCPT policy briefs which assesses the impact that the budget has had on a selected service delivery or public policy issue.
Its findings have pointed out areas of concern that require attention as well as countless examples of how our budget approach has improved service delivery and lives of our people.
In the previous financial year the directorate assessed the alignment of draft strategic plans and the PGDS. Its findings have contributed immensely in ensuring that the strategic plans of sector departments give expression to the development agenda of government and by extension funding promoting such an agenda.
Honourable Speaker, in this financial year additional mandate for this directorate is to extend the socio-economic review research and publications to the local municipalities.
This is in line with the broad mandate of government to give more support and focus to local government. The actual research has begun and will be conducted for most of this financial year while the publication will be out by September of 2011.
It is expected that such publication will provide a comprehensive picture of the socio-economic situation in all local municipalities and further contribute to development of workable local economic development plans and integrated development plans.
The other initiatives in this financial year include the establishment of the Research Advisory Committee (RAC) to advise the directorate on its research agenda and assess the quality of its research output.
Consultations are in progress with interested academics and practitioners with the view of securing the services of at least two to serve in the RAC. The department will also continue to explore ways through which capacity could be built for economic forecasting and modelling.
Corporate services
Honourable Speaker, given the magnitude of provincial oversight issues that the department is legally and politically obliged to deal with, very often these occupy a centre stage whereas there are also pressing internal matters that require our attention.
In this respect it gives me pleasure to report that immense progress has been made towards achieving our goal of being an employer of choice, caring for its employees and serving clients with passion and on time.
Our employee health and wellness programmes continue to be innovative and forward-looking in approach and implementation. In this regard we have implemented the employee active, healthy lifestyle and fitness programme launched in Kimberley and Springbok.
The aim is to keep employees mentally and physically fit to be able to engage their day to day duties as public servants. About 150 employees use the fitness facilities on almost daily basis. The facility will be extended to Upington and De Aar this financial year. Surely we are an employer of choice.
As part of the gender mainstreaming programme the department is operating a child care facility that is currently caring for 33 children. The project was the finalist in the 2009/10 Premier's Service Excellence Awards and has received impressive reviews from the adjudicating panel.
The demand has not been big to extend the facility to our regional offices but we are keen to start similar projects there. Surely we are an employer of choice.
The massive verification of qualifications project revealed that there were few instances of fraudulent claims of qualifications. We have dealt fairly but firmly with such misconducts, with at least two people dismissed already for misrepresentation of qualifications and curriculum vitae, and one person was given suspension without pay and demoted after a plea-bargain agreement.
Other cases are still under investigation. Precisely because we an employer of choice, we need to uproot dishonesty and corruption within our ranks were such exist.
Honourable Speaker, we have begun to be pro-active in managing issues of qualification and curriculum vitae (CV) fraud. We now have capacity to do pre-employment checks before the person is employed.
In the immediate future we will not have a problem of fraudulent qualifications and criminally convicted persons passing through our employment processes without us noticing. This we will do to improve, promote and protect the integrity of our employment processes, as an employer of choice.
We continue to do well in human resources development and employment equity stakes. Our bursary scheme has produced this past academic year 11 graduates and diplomats in public management, public financial management and municipal finances and development. This year we have approved 60 bursaries, mostly in finance and accounting fields to ensure future supply of those skills for the department and the province.
Women continue to constitute majority of our staff, at more than 60 percent. Over 50 percent of middle managers are women and 38 percent of our senior managers are women.
We are falling short in terms of the employment of persons with disabilities as only two percent are employed at the department, with at least one at management level.
This is the area where concerted efforts must be put to ensure that in the next three years we achieve target of 5 percent of persons with disabilities in our employ.
Our plans for 2010/11 are informed by both the current economic and political imperatives as well as the outcome of our fourth Staff Indaba held in Port Nolloth on the 29 to 30 March 2010. The Staff Indaba resolved in our statement of commitment to create conducive conditions of work towards being an employer of choice by doing the following:
- Continue to invest in the skills development of our employees to build the pool of highly trained financial and accounting personnel, capable of deployment and secondment to the coalface of service delivery with success
- Continue to deliver innovative employee health and wellness programmes for the benefit of our employees, to keep them motivated and engaged
- Continue to deliver the labour relations education programmes, including workshops on policy on sexual harassment to protect the victims of both harassment and malicious lies, therefore building organisation conducive and safe for all employees
- Continue to implement transparently and fairly the employee performance management and development system and train employees on the appeals procedure inherent in the system if they are dissatisfied and to encourage supervisors to conduct performance assessments on quarterly basis and give feedback of performance assessments to their subordinates
- Continue to find ways and mechanisms to make working conditions conducive for our employees with disabilities and
- Continue to source talented and skilled personnel, from all sources, including internally where such is available.
These commitments, developed in consultation with the employees, will be integrated in the HR and other strategic plans of the department and will form part of the life of the department.
Public Service Commission has conducted a transversal monitoring and evaluation against the nine constitutional values and principle governing public administration. This values and principles are regarded as good governance operationally. We are happy to report the results of this evaluation. We have obtained on average a score of 76%, However it is more appropriate to report on the individual values and principles.
1. Impartial and fairness 100%
2. Professional ethics 90%
3. Transparency 85%
4. Good Human Resources Management and career development practices 80%
5. Public participation in policy making 70%
6. Representation 70%
7. Accountability 60%
8. Efficient, economy and effectiveness 50%.
We were not evaluated on poverty reduction which is the last principle for we are not a line function department. We challenge other departments to voluntary subject themselves to these monitoring and evaluation process.
Budget allocations
At this stage Honourable Speaker, I turn my attention to specific allocations in the vote aimed at facilitating achievement of identified priorities. In this financial year the Provincial Treasury has been allocated an amount of R133 million. This represents an increase of 22,4 percent or an amount of R24,4 million on last year's main budget.
The programme administration is responsible for rendering effective management and administrative support to the department and effective implementation and monitoring of departmental policies has been allocated an amount of R52,6 million.
This represents about 23 percent or R9,8 million increases from last year's main budget. Some of the policy priorities in this programme are the development of the service delivery improvement plan, implementation of the performance management and development system, and maintenance of effective communication systems.
The programme sustainable resource management seeks to ensure effective and efficient management and utilisation of fiscal resources in the province. Its budget has been increased from R28,2 million from last year's main budget to R37,6 million in this financial year.
This represents an increase of 33,2 percent or R9,4 million.At least 50 percent or half of this allocation is intended to finance additional capacity in those directorates that support municipalities.
Members will not easily forget that one of the challenges posed by the latest audit reports is the management of assets in provincial departments.
Our third programme seeks to promote prudent management of asset and liabilities. This strategic goal speaks to both effective and efficient management of assets and liabilities as well as promotion of sound supply chain management practices in the province. The programme is allocated an amount of R19,2 million representing 26.6 percent or R4 million increase from last year's main budget.
The last programme seeks to promote accountability through substantive reflection of financial activities of the province as well as compliance with financial norms and standards.
Its immediate task is to ensure that audit outcomes are improved across all provincial departments and municipalities. The budget of this programme increases from R22,5 million in last year's main budget to R23,6 million.
The other areas of concentration in this respect are the full operation of the norms and standards and Risk Management Directorates.
Honourable members, it is through this budget that the department will seeks to give expression to the priorities outlined today and those bestowed on us by the Executive Council.
Ours is a responsibility to continue to find ways to ensure that the budget supports development. That department manages allocated resources prudently, and that good corporate governance is maintained.
In conclusion I would like to thank the Head of Department Mr Sello Mokoko for the relentless role he continues to play in leading the Northern Cape Provincial Treasury. My gratitude also goes towards senior managers and all officials in the department whose commitment and work enabled us to arrive at the current state of the organisation. The support staff in the ministry for diligent work must also be commended.
Honourable Speaker, I commend budget vote eight to this august house.
I thank you!
