Madam Speaker,
Honourable Premier,
Colleagues in the Executive Council,
Honourable Members of this House,
The HOD and Management of Treasury,
Comrades and friends,
Ladies and gentlemen.
Introduction
Let me begin by emphasising the point that it is an obligation on all leaders in the public sector, as people who are entrusted with managing public resources, to be fully answerable to those who gave them the important responsibility of constituting and managing a government. These are the masses of our people who make up the electorate.
Through a simple act of voting every five years, they entrust public representatives with a responsibility of using their hard earned money that is collected from them via rates and taxes to improve public service delivery. This is done through targeted investments in key public programmes including social grants, education, healthcare, social services, economic development and safety and security.
That is why we must always demonstrate that the money that we manage on behalf of the public is not wasted through fraud and corruption, but it is used to accelerate the provision of public services to the people.
It is because of this that we table the Annual Report of the Gauteng Provincial Treasury publicly every year. This Report is one of the tools that enable us to account to citizens for our performance against set targets, financial and non-financial, and demonstrate that our activities in the previous year contributed to the achievement of key service delivery imperatives to the People of Gauteng.
To better understand Treasury’s performance as reflected in the 2013/14 Annual Report, it is important to note that the previous political term began with an economic downturn resulting in a chop in provincial funding. The situation was made worse by uneven financial management, in some departments, resulting in severe cash flow challenges.
In order to address these matters, hard decisions were taken to improve the financial position of the province and accelerate public service delivery to our people. The milestones highlighted in this Annual Report represent the consolidation of those key decisions to strengthen financial management and governance.
It is for this reason that today we can celebrate the fact that the five departments and three entities who achieved clean audits in 2012/13 financial year sustained these outcomes in 2013/14. In addition, one department and ten more entities improved to clean audit this year, enabling government to achieve a record nineteen clean audits in 2013/14.
Key performance highlights
Treasury recorded another solid financial and non-financial performance in 2013/14. The department spent a total of 95 percent of its budget and there was no unauthorised, fruitless and wasteful expenditure in the year under review.
Equally important is the fact that for the second consecutive year, Treasury led by example and achieved a clean audit. In addition to this, the department provided strong leadership and oversight in financial management in the provincial government, which resulted in the achievement of a total of nineteen clean audits.
The department has continued to implement cost containment measures to stabilise provincial finances. This has resulted in a downward trend in unauthorised expenditure in the province from R2.1 billion in 2009, R1.4 billion in 2010, R1 billion in 2011, R393 000 in 2012/13 and the figure was only R56,847 in 2013/14. These achievements were made possible through the following:
- Ring-fencing of Conditional Grants funds and earmarked funds for infrastructure projects
- Constant monitoring on any areas that may result in unauthorised spending and forewarn departments;
- Cash flow management (monitoring of cash disbursements with the payment runs);
- Ring-fencing of Compensation of Employees funds;
- Ensuring that departments spend in line with the allocated budget.
Treasury is committed to maintaining the improved financial position of the province by instilling fiscal discipline in key areas of expenditure, revenue collection and cash flow management.
In 2013/14 the provincial government spent 97.2 percent of the total adjusted budget of R84 billion. This was achieved through, amongst other things, monitoring of conditional grant expenditure and outcomes, adherence to grant frameworks by grant managers, ensuring value for money.
The ever increasing demand for resources to fund the delivery of public services in the province has led to Treasury placing particular focus on improving the provincial share of the overall budget. In the year under review the department achieved its collection target by collaborating both the Department of Health and Department of Roads and Transport to increase collection of revenue through patient hospital fees and motor vehicle licenses respectively. These initiatives assisted Treasury to surpass the provincial share of revenue by 9.7 percent, reaching R4.34-billion in the 2013/14 financial year.
As a result the province’s contribution to the budget increased by a total R1, 723 billion since 2009 and this represents a cumulative increase over five years of 65.73 percentage points. Over the next five financial years we believe we can improve collections from health and transport by 27.7% and 29.7% respectively.
Furthermore, the implementation of robust cash management practices resulted in positive cash flow levels for the provincial government as at the end of the 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.
We continued to support municipalities in their work in order to contribute to service delivery on the ground. In this regard we enhanced the capacity of municipal internal audit units, asset management units and audit committees. These measures have assisted in ensuring that we achieve clean audits and improve service delivery to our people.
The department continues to roll out the Municipal Finance hands-on support programme, which entails deploying suitably qualified financial advisors to local municipalities, in an effort to improve the performance and audit outcomes, and impart the necessary skills to ensure sustainability beyond their stay.
In addition, working together with the Department of Cooperative Governance and Traditional Affairs, 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.
Treasury has intensified its efforts to improve supply chain management processes in the province. The focus will continue over the medium term period. Our focus areas included monitoring implementation of policies, rules and regulations, reporting system across all departments to assess preferential procurement policy outcomes and ensuring that there is compliance with procurement plans.
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.
Treasury intensified the fight against fraud and corruption in the year under review. About 79 000 GPG employees were verified to ensure that salaries are paid to people appointed in line with the approved organisational structures.
The Identity Verification Solution (IVS) campaign has assisted in eliminating ghost employees from the system therefore saving government funds that can be directed to service delivery priorities.
Gauteng Funding Agency
Madam Speaker; let me now turn to the Gauteng Funding Agency, an 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 2013/14, GFA achieved a clean audit opinion yet again. The Agency has continued to make its experience, skills and competencies available to sponsoring departments and municipalities in Gauteng to interface with prospective external funders.
The GFA’s project pipeline in 2013/14 was a “mix-bag” of social and economic projects across different sector, 28% social and 72% economic. The GFA has completed most of the feasibility studies and various processes are being undertaken on these projects such as preparing the terms of agreements for financing or preparing PPP registration with National Treasury. So far two projects are funded through a mix of private investment and on-balance sheet and these projects are currently being implemented.
I must inform this House that the Ministers of Public Service and Administration and Finance have concurred that the GFA can be established as a Government Component. The process of publication of the notice in the Government Gazette on this matter will follow in due course in line with the legal requirements.
Going forward GFA will work with the Treasury to establish a central point for coordination of infrastructure projects in the province. The agency will also offer a full bouquet of services to the project-owners by assisting with procurement and contracting.
I hereby table the annual reports of Treasury and the Gauteng Funding Agency in terms of Rule 47(1)(2).
Thank you
