Johannesburg – Gauteng, the most populous province in the country, is on track to restore its financial well-being, Finance MEC Mandla Nkomfe said on Monday.
The past three fiscal years have been difficult for the province, with diminished collection rates from revenue sources and the sharp decline in equitable share, which led to cash flow problems. This was also due to poor financial management, resulting from unauthorised spending by some departments.
“This spread our budget too thin, threatening our ability to fully resource our priorities and meet our service delivery agreements,” Nkomfe said.
The province then undertook austerity measures while shifting available funds to finance priority outcomes, and also implemented containment measures and contract management reform processes, among others.
“I would like to report that as a result of [several] measures, we are slowly but surely restoring the fiscal well being of the Gauteng Provincial Government,” said the MEC, adding that signs of improvement included the tabling of a balanced budget in 2011/2012 financial year.
Nkomfe said the province has not budgeted for a deficit. “We don’t have a deficit.”
Asked about how much money has been lost as a result of corruption, Nkomfe said this has not been quantified.
In the year to March 2011, the province generated revenue of R2.8 billion which is an increase of R100 million from the adjusted R2.7 billion appropriation.
“This was from motor vehicle licenses, gambling and betting taxes and hospital patient fees.”
The Departments of Roads and Transport, Economic Development and Health and Social Development contributed R1.7 billion, R535.1 million and R438.4 million respectively to revenue. These departments contributed 97 percent to revenue for the year under review.
On the issue of supplier payments, the province has experienced problems with service providers not being paid within the stipulated 30 days timeframe after receiving an invoice. This, however, is improving, said Nkomfe.
In the next three years, the province will spend R30 billion maintaining existing infrastructure and building new facilities, which is expected to create jobs.
“On the centralisation of procurement, the challenge of expertise has been highlighted as far as the evaluating of tenders, proper planning, and also ensuring that at the end of the day contractors are paid on time. The centralisation will, in a way, try to deal with those issues, to ensure that [we] bring on board appropriate expertise,” acting head of department, Nomfundo Tshabalala explained.
She said, however, the decision making processes of tenders still lies with departments’ accounting officers. – BuaNews
