The article published on Politicsweb.co.za on 01 November 2016 by Democratic Alliance’s Member of the Provincial Legislature Ms Adriana Randall “Creecy fails to table provincial financial statement”, is factually incorrect and misleading to the public.
Gauteng MEC of Finance Ms Barbara Creecy has over the past two financial years (2014/15 and 2015/16) submitted the Annual Consolidated Financial Information (ACFI) reports to the Provincial Legislature on time as prescribed by Section 19 of the Public Finance Management Act.
PFMA prescribes that the Annual Consolidated Financial Statement Information must be submitted to the Provincial Legislature at the end of October each year, detailing the consolidated financial position and performance of the provincial government in the previous year.
In line with this requirement, the 2014/15 ACFI report of the Gauteng Provincial Government was submitted to the Legislature on 30 October 2015 and the 2015/16 report was submitted to the Legislature on 31 October 2016. These submissions were also acknowledged by the Office of the Speaker at the Provincial Legislature.
For more information on the 2015/16 Annual Consolidated Financial Information, please go to www.treasury.gpg.gov.za for a full report.
Below is the statement issued by the Gauteng Department of Finance on Tuesday, 1 November 2016:
Gauteng increases spending to meet public service delivery needs of citizens
Finance MEC Barbara Creecy has this morning announced that the Gauteng Provincial Government spent R95.9 billion of the total 2015/16 budget, a 10.6% increase from previous year as departments pushed expenditure to meet the service delivery needs of citizens.
The figures are contained in the Annual Consolidated Financial Statement Information (ACFI) of the Gauteng Provincial Treasury that details the consolidated financial position and performance of the provincial government in the previous year.
Spending on goods and services amounted to R19 billion, up from R17 billion the previous year. “The analysis of expenditure on goods and services reveals that the provincial government surpassed the 12% target for procurement from township enterprises, to reach an actual procurement of 14.1% or R6, 8-billion,” MEC Creecy said.
The MEC noted that while on paper the Department of Health did not spend 2% of its budget in the year under review, this did not mean that resources were returned to the Provincial Treasury.
“This under expenditure was an accounting entry more than an actual under expenditure. This happened due to accrued expenditure from prior financial years. The accruals result in a mismatch between cash and budget and reflect on the Basic Accounting System as under-expenditure,” she said.
The Department of Health is constitutionally bound to provide services to all citizens including patients from other provinces when they come to Gauteng hospitals. This leads to additional expenditure for medicines and other consumables but it does not mean that the money is wasted or that it has not been spent on the health needs of the province.
“Nevertheless, the current level of accruals across the provincial government is too high. It is for this reason that we are prioritizing measures to contain accruals. Of importance is that during the course of the year, the budgets of the affected departments must strictly prioritise existing accruals and commitments, and discipline in the utilisation of the remaining funds will be enforced,” said the MEC.
According to the ACFI, the Auditor-General has given the 2015/16 consolidated annual financial statements of departments a clean audit status, while the consolidated annual financial statements of public entities have been classified as unqualified.
The provincial government drastically reduced fruitless and wasteful expenditure (interest paid on overdue accounts and litigation settlements) by 93% from R415 million in 2014/15 to R29 million in the year under review.
This was achieved largely because in 2015/16 financial year, 10 of the 14 departments paid 90% of their invoices within 30 days. In fact, 9 departments achieved payment rates of 95% and higher.
Irregular expenditure also dropped by 26% from R5.5 billion in 2014/15 to R4.1 billion in the year under review. Major contributing departments to irregular expenditure were Roads and Transport followed by Education, Health and Human Settlements. However irregular expenditure in GPG entities decreased by 43% from R64 million in the 2014/15 financial year to R36 million in the year under review.
Irregular expenditure is incurred when goods are procured without complying with all applicable supply chain management rules and regulations.
“It is not acceptable that supply chain management officials continue to flout supply chain management regulations and processes. That is why I have written to MEC’s of departments that incurred irregular expenditure to express my serious concern and asked them to take appropriate disciplinary actions against responsible officials, and also take urgent steps to prevent the recurrence of irregular expenditure,” MEC Creecy said.
“In addition we are accelerating the implementation of the Open Tender System, amongst other things, to ensure compliance with supply chain management processes and build a clean and transparent government,” she added.
An amount of R12. 8 million incurred in the year under review related to Department of Sports, Arts, Culture and Recreation (overspending of a programme) and classified as unauthorised expenditure by the AG.
“The Provincial Treasury will continue to ensure effective financial management control that promotes transparency and accountability in the delivery of services to the public. This is because the resources given to us for safe-keeping come from our hard pressed citizens who expect greater assurance that Treasury is working hard to stretch scarce rands; eliminating waste and corruption, restoring public confidence and good governance especially in procurement processes, and achieving better audit outcomes,” she added.
According to the ACFI, spending on infrastructure and conditional grants improved to reach 97% and 98% respectively in the year under review. Furthermore own revenue collection from sources including hospital patient fees and motor vehicle licenses increased by 9.7% from R4.9 billion in 2014/15 to R5.4 billion in 2015/16.