• Caught in the debt trap?

    Help us help you by taking our second annual Debt survey and you could win R3 000.

  • Rich man, poor man

    Culture change from below is the only way to overcome poverty, says Leopold Scholtz.

  • Tech bubble talk

    After the tech euphoria of 2013, the fast-moving sector has hit a speed bump.

Data provided by McGregor BFA
All data is delayed
Loading...
See More

Limpopo moving towards financial health

Jun 06 2012 16:07

Related Articles

Troubled Limpopo ups budget by R5.9bn

How Limpopo went bankrupt

ANC in Limpopo denies financial crisis

Intervention team ends R320m Limpopo tender

Mathale calls for focus in Limpopo

Malema cronies looted Limpopo - report

 
Cape Town - The financial crisis in Limpopo, which saw the province teetering on the edge of bankruptcy, has been "effectively solved', National Treasury deputy director general Kenneth Brown told MPs on Wednesday.

Briefing Parliament's public service and administration portfolio committee on government's take-over of the running of five of its departments, he said there had been an improvement in Limpopo's financial performance.

Cabinet invoked a section of the Constitution last year to place the province's treasury, together with its departments of education, health, public works, and road and transport, under national administration.

At that point, the provincial government had accumulated R2.7bn of unauthorised expenditure, and exhausted its overdraft limit with both its commercial banker and the SA Reserve Bank.

In addition, Brown said, a number of departments "were found to be engaging in irregular supply chain procurement practices, which were further draining provincial resources".

However, the situation at the provincial treasury had now improved.

"It improved from a negative position in November [last year] to close at a positive R231m at the end of March [this year]. The liquidity and solvency crisis is thus effectively solved," he said.

Payments to suppliers were "normalising", although total payments outstanding were R1.1bn.

"Going forward, the payment intervals of the province will be aligned to receipts from national government in order to avoid future liquidity problems."

Brown said a "credible" budget for the province had been drafted and tabled in March this year.

Further, a detailed plan had been developed "to capacitate the budget planning and cash management functions within the provincial treasury".

A recruitment process was underway to fill the vacant head of department slot within the provincial treasury.

On the Limpopo education department, he said there had been a "significant improvement" in its budget spending - from 2.6% over-expenditure in 2010/11, to 0.4% in 2011/12.

Outstanding textbooks for pupils were being delivered during the course of this month.

A critical next step was to verify the number of teachers and pupils in the province.

Among other things, the department's supply chain management "policies and delegations" were currently under review, as were procurement processes.

Tackling corruption

On the province's health department, Brown said its pharmaceutical depot was set to change from a decentralised to an in-house management system.

On public works in the province, he said the most critical element of national government's intervention was "addressing irregularities in respect of lease management".

The department was paying higher than market rates for property leases and rentals.

Further, it was discovered that some departments had bought property "without registering these in the provincial asset register".

Brown said the intervention in Limpopo's roads and transport department had "led to the gradual elimination of frivolous and irregular items that have been drawing funds away from critical service requirements in respect of the province's road network".

Responding to questions on government's interventions, which took place in provincial departments across four provinces, including Eastern Cape, Limpopo, Free State and Gauteng, public service and administration director general Mashwahle Diphofa said a number of disciplinary cases had been identified.

"At this stage we have a database of cases that have been identified where investigations are proceeding."

Processes to determine whether people were "in conflict with the law" and where either criminal proceedings or disciplinary sanctions needed to be imposed, were ongoing.

"I think it's only fair we let these processes unfold," he said.

Brown told the committee that corruption among officials needed to be tackled more urgently.

"Honourable Members have... spoken about corruption as the root of the problem that we face, and if we don't act in a more proactive way, to find a way of solving [this], we will be talking here about the same problem every year," he said.

According to figures shown at the briefing, a total of 141 "cases" requiring disciplinary action or criminal investigation have been identified. Of these, 30 have been finalised.

polokwane
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
2 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

Keep cops out of politics, Icasa hears

The SAPS should not be drawn into politics because it is a statutory institution, Icasa's complaints and compliance committee has heard.

 
 

Latest elections multimedia

Watch what happened when we blindfolded Helen Zille and asked her to eat random things
13 days to elections - news you need to know
11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...