CoGTA fails to spend R3bn of its budget - report | Fin24
 
In partnership with
  • Covid-19 Money Hub

    The hub will help answer your business and money questions during the coronavirus crisis.

  • Dudu Myeni

    The former SAA chair has been declared a delinquent director for her role at the national airline.

  • Cigarette Ban

    Govt says emerging research shows smoking leads to more severe cases of Covid-19.

Loading...

CoGTA fails to spend R3bn of its budget - report

Oct 08 2017 16:30
Liesl Peyper

Cape Town – The Department of Cooperative Governance and Traditional Affairs (Cogta) has been fingered in a parliamentary report for underspending R3.2bn of its budget, which has a negative effect on municipal service delivery.

Parliament’s standing committee on appropriations, which monitors the spending patterns of state departments, expressed concern over a number of state departments for either under of overspending in the 2016/17 financial year.

The huge under expenditure of (Cogta) is mainly attributed to poor spending on the municipal systems improvement grant, which in turn was caused by delays in the submission of invoices by service providers.

The municipal infrastructure grant is used for infrastructure and basic services to communities in predominantly rural areas.

READ: Treasury targets infrastructure underspending 

The Department told the appropriations committee that municipalities lack specialised skills for the successful implementation of infrastructure projects, as well as leadership and financial management.

The skills shortage at municipal level and lack of leadership and accountability were also highlighted by auditor general Kimi Makwetu earlier this year when he presented the audit results for municipalities.

Makwetu said for the past five years there has been a trend of a lack of accountability and consequences by municipalities.

READ: Municipalities lack accountability for finances - AG 

He called for better monitoring of municipalities and added that if money granted to municipalities is adequately controlled and managed and used for purposes intended, it will ensure that more resources could then be channelled towards service delivery.

Late payment of invoices

In addition to the underspending, the Department was also guilty of only paying 90% of its invoices within the prescribed 30-day timeframe, the report noted.

In 2015, government launched a strategy to ensure service providers are paid within 30 days. Millions of invoices however are either paid late or not paid at all.

READ: Govt's late payments to service providers add up to R3.3bn

National Treasury’s Office of the Chief Procurement Officer told Parliament in May this year that it had received over 5 000 queries about unpaid invoices totalling R620m between July 1 2016 and March 30 2017.

Parliament said in its report it views the non-payment of invoices, especially money owed to small and medium enterprises, in a serious light. “This could result in some businesses having to close down.” 

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

How has Covid-19 impacted your financial position?

Previous results · Suggest a vote

Loading...