Limpopo moving towards financial health

2012-06-06 16:07

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.

  • Vince - 2012-06-06 16:20

    Excellent, now when are the people who stole over a R1bn going to be arrested and please note they do not have to be suspended simply fired!! Don't pass begin and don't collect another cent!

  • Loo - 2012-06-06 16:38

    there we go .. juju out of the govt there for a month and already an improvement. The collective IQ there jumped from 6 to 16 now

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