Fin24

Province intervention 'necessary'

2011-12-07 08:03

Johannesburg - Cabinet's intervention in Limpopo, the Free State and Gauteng is necessary to ensure that financial mismanagement does not compromise service delivery, the human rights group Section27 said on Tuesday.

"We welcome cabinet's move to take action to resolve the financial management crises that are rapidly pushing many provincial departments, and... provinces themselves, towards economic collapse," it said in a statement.

"The most devastating consequences of any failure to resolve these crises will be felt most severely by the poor. This cannot be allowed to happen."

On Monday, cabinet announced that the national government would intervene in some areas of the Free State, the health department in Gauteng and five provincial departments in Limpopo.

Finance Minister Pravin Gordhan told SABC radio news that cabinet had been monitoring the finances of these provinces for some time.

"There's been a... trend of underspending, overspending, violating supply chain provisions and this is what we want to thoroughly investigate now," he said.

Section27 said it had called on the national government to take control of provincial obligations more than a year ago.

This was following the release of the integrated support team report commissioned by former health minister Barbara Hogan into the financial management of provincial health departments.

"It was clear then that these departments were failing to properly manage their finances and if left unchecked would result in the crisis we see today," it said.

Earlier, the lobby group AfriForum said the intervention by the national government intervention showed that South Africa was heading towards a failed state.

AfriForum community affairs head Cornelius Jansen van Rensburg said it was surprising that Gauteng, as the richest province in South Africa, was in need of financial and management assistance.

"This raises questions on the financial health and stability of other provinces. In a nervous international economic climate, South Africa can ill afford the collapse of government institutions," he said.

Jansen van Rensburg said a collapse at provincial and local government levels would force communities to find alternative ways to ensure sustainable service delivery.