Speech by Mr Mandla Nkomfe, Gauteng MEC for Finance, on the occasion of tabling the 2012/13 annual report of the Gauteng Provincial Treasury, Gauteng Provincial Legislature

Madam Speaker;
Honourable Premier;
Colleagues in the Executive Council;
Honourable Members of this House;
The HOD and Management of the Gauteng Provincial Treasury;
Comrades and Friends;
Ladies and gentlemen.

Introduction

On this occasion of tabling of the Annual Report of the Gauteng Provincial Treasury, I am honoured to take this opportunity to share with the House several key highlights of our performance, which we recorded in the 2012/13 financial year.

The Annual Report period is very important not only to us as Treasury, but to the rest of government and the people of Gauteng. This is because the Annual Report is one of the tools that enable us to account for our performance, financial and non-financial, and demonstrate that our activities in the previous year contributed to the achievements of key service delivery imperatives to the People of Gauteng.

To contextualise the performance of Treasury as reflected in the Annual Report, it is perhaps necessary that we refer to the situation at the beginning of the political term of government in 2009. At that time the sharp decline of the equitable share and the diminished collection rate from our own revenue sources as a result of the global economic downturn led to cash flow challenges.

That situation, coupled with poor financial management in some of our departments at the time led to over-commitments and unauthorised expenditure. This spread our budget too thin; effectively threatening our ability to fully resource our priorities and meet our service delivery obligations to the People of Gauteng.

Driven by the desire to ensure that our operations continue to run as planned and service delivery is not impacted, we took hard policy decisions to improve the financial position of the province and accelerate public service delivery to our people.

In this context, the milestones that we are highlighting in this Annual Report represent largely the consolidation of those key policy decisions taken to address weaknesses identified in areas of financial management and governance, and build a strong service delivery system capable of delivering on the electoral mandate.

Key Performance highlights

Madam Speaker; the 2012/13 financial year was a challenging period for us but the department managed to deliver yet another strong performance, which clearly demonstrate the road that we have travelled since 2009.

First and foremost, I would like to formally inform this House that the Gauteng Provincial Treasury achieved a clean audit report in the year under review. In addition to this, we provided strong leadership and oversight in financial management which resulted in the achievement of eight clean audits and twenty three (23) unqualified audit reports in the province.

At the same time, our interventions in the Department of Health through Section 18 of the Public Finance Management Act resulted in the achievement of a qualified audit opinion with far less findings and also the department has not overspent its budget for the first time in years. The appointment of an Administrator will ensure that we focus on issues that still require attention in order to build on these gains.

Madam Speaker our audit outcomes shows that we have done a lot since 2009 to move towards clean government. This view is underscored by the Auditor-General’s comment that the information provided for annual performance audit was useful and consistent with the planned programmes.

This is due to the fact that this information was well defined, verifiable, specific, and measurable and time bound. This indicates a clear path towards achieving clean audits. But in order for us to realise that goal, we must do much more on key areas of internal controls, compliance with rules and regulations, boosting financial management capacity and implementing audit action plans to improve the status quo.

Madam Speaker; we have turned around the financial position of the province. This is reflected in our achievements in areas such as cash flow, expenditure and revenue management.

In the year under review, the total budget of the province amounted to R74.7-billion. By the end of the financial year, the province had spent 99% of this budget. Indeed it was the first time that such a spending rate had been reached by the province. This achievement reflected the work that we have done since 2009; not only to improve spending but also to ensure that departmental expenditure is aligned to provincial priorities and happens in a prudent way to meet the service delivery needs of the People of Gauteng.

In this political term of office, the ever increasing demands for resources to fund the delivery of public services in the province placed the spotlight on Gauteng’s Own Revenue Generated. In response, the Gauteng Provincial Treasury worked tirelessly to vigorously implement our revenue enhancement strategy.

As a result by the end of our financial year in March, for a third year running the provincial government had surpassed income generated from its revenue sources. Total revenue collected stood at R3, 946 billion. This meant that government exceeded its targeted collection for the financial year by R166.981 million.

Furthermore; robust cash management practices implemented resulted in positive cash flow levels for the provincial government as at the end of financial year in March. This essentially meant that the province had sufficient cash to fund the needs of departments. Equally important, prudent investment of our revenues improved liquidity in the province.

Madam Speaker; we continued to support municipalities in their work in order to contribute significantly to service delivery on the ground. In this regard we enhanced the capacity of municipalities by strategically deploying qualified officials to properly manage the finances of local government in the province, and impart the necessary skills to ensure sustainability beyond their stay.

In addition, working together with Local Government and Housing, we hosted robust bilateral engagements with the leadership of municipalities to ensure coordination and continued support with the view of enhancing service delivery to communities.

Madam Speaker; the Gauteng Provincial Treasury is one of the key departments charged with leading the fight against fraud and corruption in the province. We share this responsibility with Office of the Premier and the Gauteng Department of Finance. We therefore call on all our departments and municipalities to act decisively on issues of fraud and corruption, and urge staff members to blow the whistle on any corrupt activity.

As part of discharging our responsibility in the fight against fraud and corruption, we launched the Identity Verification Solution project in the last month of the 2012/13 financial year. Our aim in this regard is to enhance the accuracy of the payroll system, match bank account details with authentic officials and eliminate overpayment of salaries to employees who have terminated their services.

This project was launched in the Department of Health and has been rolled out in the Gauteng Provincial Treasury, Office of the Premier and the Gauteng Department of Finance. This process will be completed by the end of the current financial year. By that time we expect that all provincial government employees would have been verified to ensure that salaries are paid to people appointed in line with approved organisational structures.

Madam Speaker; in order to bring about clean government, there is an urgent need to improve the accounting knowledge and expertise in the public service. We need the efforts of everyone in order to succeed in this regard because this task is bigger than any individual department.

It was with this in mind that we approached the South African Institute of Professional Accountants in the year under review with a view to establish a partnership to develop professional accountants for the public service, to address the challenges that we are experiencing in attracting this particular skill. I am very proud to inform this House that indeed we have become the first government department in the country to be approved as an Accredited Training Centre for SAIPA. We will use this status to meaningfully contribute to increasing the pool of professional accountants in the province and the country.

The department received its accreditation in January and has developed an intensive three year programme that will provide BCom graduates with the skills and knowledge required to qualify as professional accountants. A total of 19 trainee accountants have already been recruited into the programme, which has a budget of nearly R2 million for this financial year.

This development will enable practicing accountants in the department to transfer skills to trainee accountants and prepare them for board exams that will qualify them to become professional accountants.

We believe that this and other measures that we have adopted in terms of recruiting and retaining highly skilled employees will enable us to capacitate the department so that it could fully discharge its mandate. This is important because as a strategic department which manages provincial resources and provide leadership on all financial matters in the province, our constitutional mandate means that we enable service delivery on the ground.

Gauteng Funding Agency

Madam Speaker; let me now turn to the Gauteng Funding Agency, a trading entity of the Gauteng Provincial Treasury. The primary focus of GFA is project development and designing optimal funding solutions for infrastructure projects in the province.

I am indeed proud to announce that in 2012/13, GFA achieved a clean audit opinion.

In the year under review, GFA continued to make its experience, skills and competencies available to sponsoring departments and municipalities in Gauteng to interface with prospective external funders. This was evident in the steady increase of GFA’s project pipeline which stood at 15 projects at the end of the financial year with a total value of R22 billion.

These projects included the West Rand Logistics Hub, Gauteng Smart City, and Sedibeng Waste to Energy Project, Gauteng Schools Programme, Hospital Revitalisation Programme and Hospital Information System. The projects were at various stages; some were still been developed while others had been handed over to sponsoring departments after the necessary feasibility studies had been completed

I must mention Madam Speaker that the William Nicol Road project is at implementation stage with a funding arrangement agreed upon between the Department of Roads and Transport and the implementer.

Conclusion

Madam Speaker; There is no doubt that the achievements of the past year have been largely due to prudent financial management practices driven by a strong political will to succeed. In that context, let me thank the Premier and colleagues in the Cabinet for their continued advice and support.

I also thank the Standing Committee on Public Accounts and the Finance Portfolio Committee for engaging us vigorously and methodically on our work. Indeed through their wisdom we have continuously improved our operations.

Furthermore; may I take this opportunity to thank the staff of Gauteng Provincial Treasury led by HOD Nomfundo Tshabalala for the hard work that they are doing, sometimes under very trying circumstances. I also thank the Chief Executive Officer of the Gauteng Funding Agency Oupa Seabi and his team for the job well done. I urge them to take pride in their work, noting that their efforts impact positively on millions of our people.

That is the level of satisfaction that one gets by being a public servant!

Thank you

Province

Share this page

Similar categories to explore