KwaZulu-Natal Provincial Treasury Budget speech for the 2012/13 financial year by the MEC for Finance, Ms CM Cronjé in the Provincial Legislature
1 Jun 2012
A week ago we were celebrating Africa Day. Contrary to the erstwhile picture of a "hopeless continent," as we were often portrayed by some people in developed countries, the African continent is posed to grow and the world is looking at us with renewed interest.
There has been growth in political stability and democracy; improvements in global competitiveness; and Africa holds 60% of the world’s available, unexploited crop land. We also have a young population, who is embracing communication technology.
Many of the 54 countries on the continent are positioning themselves for Gross Donestice Products (GDP) growth of more than 5% per annum. In fact, as the Harvard Business review recently said, "Africa holds the same potential as China did 20 years ago."
The challenge according to Steuart Pennington of SA Good News fame (Steuart Penning: SA Good News: May 25th is Africa Day, but understanding Africa is difficult. 22 May 2012) – is that we have to present the signs of transformation coherently to the rest of the world and demonstrate that it will be sustainable.
What better way to do it than through sound financial management, which we all know can be a real catalyst for change in the war against poverty, unemployment and inequality. Across the globe there is a growing demand for financial information, disclosure of financial information and transparency of transactions. Financial reporting and integrity are topping the list of requirements for good governance.
The Provincial Treasury, with the leadership and support of the Premier and the Executive, has managed to guide the province successfully through a very difficult time in enforcing prudent financial management and budget discipline. The province has turned around a disturbing trend of over-expenditure and negative cash flows within 18 months, into generally within budget expenditure and a healthy positive cash position.
The objectives we set for ourselves since 2009/10 could only be achieved with the support of the provincial departments and the public entities. As the change agent, the Provincial Treasury has set service standards and objectives in liaison with our clients, and through monitoring and evaluation ensured that these standards and goals are being met in terms of governance and implementation.
However, we are acutely aware of several weaknesses remaining in the control environment and the financial management of some departments, public entities and municipalities. We will not turn away from these challenges, but will confront them boldly and fearlessly. The budget we are submitting for consideration today is making provision for continued and additional improvements in controls and standards:
- to strengthen financial management in the province
- to achieve value for money in all areas, and
- to ensure improved service delivery.
The Provincial Treasury endeavours to strengthen its role as a change agent in financial resource allocation, sound financial management and the promotion of prudent corporate governance.
The Head of Department and I, with our support staff, have embarked on a substantial liaison strategy with departments, public entities and municipalities in response to the real needs and numerous demands for assistance. We are committed to further strengthen the Provincial Treasury’s function of providing financial oversight and support, as well as making interventions where necessary.
All the business units in the Provincial Treasury have significant roles to play in this regard and will concentrate on ensuring improved-
- budget and expenditure management and accurate and credible reporting
- assistance to departments and municipalities to address the weaknesses in infrastructure capacity where spending has lagged behind plans
- financial management practices and procedures throughout the province and
- compliance, performance and good governance culminating in clean audits in all provincial and municipal institutions and entities.
The funds requested under Vote 6 are in the main to retain present expertise, to build further in-house capacity in the various components and, where required, to source-in scarce skills.
Commitement of the Provincial Treasury
I am again committing the Provincial Treasury and myself in 2012/13 to:
- ensure equitable resource allocations for the province of KwaZulu-Natal
- analyse and monitor government (provincial and local, including public entities) revenue and expenditure
- instil prudent financial management and good governance
- do robust public policy research
- contribute to the realisation of government policy priorities by ensuring that government interventions in the economy are targeted, efficient, sustainable, and empower our people
- the ongoing revision and tightening of systems and processes in supply chain management that would reduce the possibility of financial abuse and
- the detection and elimination of non-compliance and fraud and corruption in government through our Internal Audit Branch.
As custodian of provincial finances I am committed to lay a strong foundation for the best possible return on resources expended, and to be the key channel in collaboration with the Premier and the Executive to improve efficiency and effectiveness in our operations in order to achieve optimum service delivery.
Greater attention will be paid to training and mentorship programmes in addressing capacity constraints of departments, public entities and municipalities. Professionalism, hard work, getting the basics right and commitment are preconditions for successful service delivery. There will be no compromise on the basic principles of sound financial management and good governance.
The Provincial Treasury has increased its focus on public entities. This includes assessing public entities’ compliance with the Public Finance Management Act (PFMA) No.1 of 1999 as amended by Act 29 of 1999 and Treasury Regulations, as well as identifying and structuring support programmes and interventions.
This increased focus covers a wide range of issues, such as listing, board remuneration, strategic and annual performance plans, budgets and quarterly performance reporting in respect of financial and non-financial performance.
Overview for the 2012/13 financial year
Value for money
The financial recovery processes instituted by the executive since March 2008 achieved remarkable success and we will continue to enforce the cost cutting measures in the province. To ensure value for money, the Provincial Treasury will focus with renewed vigour on the structure and efficiency of government institutions, and the essential task of fighting corruption and fraud.
We are in the process of reviewing the budget of all provincial departments and entities to ensure alignment with our priorities and functions in order to ensure greater economy, effectiveness and efficiency.
We are committed to ensuring sound financial management across all government institutions; hence we have taken note of the findings of the Auditor-General and our own Internal Auditors. An analysis in this regard has revealed a number of weaknesses including skills and capacity constraints in many government departments, municipalities and public entities.
As a department we have set ourselves a target of ensuring clean audits in all government departments, municipalities and public entities.
This can only be done through focusing on:
- improved support and guidance, and
- credible reporting by all relevant institutions including municipalities and public entities.
Strategic Projects to profile and showcase the province
As stated in my main budget speech earlier this year, our Cabinet has proposed that an allocation of R40 million per annum be made available over the 2012/13 MTEF to finance strategic projects that can profile and showcase the province as an investment and tourism destination of choice internationally.
The allocation will be used to fund special events such as for instance international sport tournaments that will draw international audiences and participants to the province. This allocation will be located within the Provincial Treasury Vote and will be accessed as and when required, based on clear business plans that meet the criteria.
Provincial Treasury also receives the carry-through costs for the development of the Pietermaritzburg and Ulundi airports. These projects and the development of the Richards Bay airport are already under way and should be finalised in 2012/13.
The Provincial Treasury also receives an allocation over the MTEF for a BEE verification exercise that will be undertaken on all service providers who do business with government. I will now turn to the details of Vote 6 and indicate the functions of each programme.
Overview per programme for the 2012/13 Financial Year Programme 1: Administration –R100,094 million (up from R99,861 million)
The small increase is far less than an inflationary adjustment, mainly because the fees of the Auditor General have been reduced, following the completion of a once-off performance audit in 20011/12. That money has been reallocated to other areas.
This programme caters for the executive strategic role and functions and the overall managerial and corporate functions of the Provincial Treasury. It comprises the Offices of the MEC, Head of Department, Chief Financial Office, Corporate Services and Human Resource Management. Both the MEC for Finance and Head of the Department have substantial national commitments in the Budget Council and other national structures, and funds have been allocated for this purpose.
As a team, the HOD and I, together with our Senior Management, will continue to interact with Departments at executive and senior management level to fulfil our mandates of support, guidance and monitoring. The same approach has been adopted with our municipalities through our support progammes.
Public entities in the province must play a vital role in our job creation drive and the provision of services to our people, and therefore the Treasury has embarked on programmes to increase monitoring of and support to these institutions.
The functions and powers of Provincial Treasury are enunciated in Section 18 of the PFMA, which states that “a provincial treasury must, inter alia:
- prepare and exercise control over the implementation of the provincial budget
- promote and enforce transparency and effective management
- enforce compliance with the PFMA, DoRA and any other relevant legal prescripts, policies and norms and standards.
The Provincial Treasury may, inter alia:
- assist in building capacity
- investigate financial management and internal controls, and, importantly, must
- intervene by taking appropriate steps, which may include the withholding of funds, to address a serious or persistent material breach of this Act by a provincial department or a provincial public entity; and
- do anything further that is necessary to fulfil its responsibilities effectively.
The promotion of communication with all our clients and the people of our province is a vital part of the functions of both the MEC and the HoD. Our efforts to establish real dialogue between government institutions as well as civil society institutions and ordinary citizens will continue.
My Office will continue to organise business breakfasts, where we meet with the business sector; community izimbizo; financial education programmes and other information sharing and gathering events that offer invaluable opportunities for citizen participation. We will also strengthen our interaction with organised labour as we believe labour adds a vital perspective to our work.
One of the flagship programmes of the Provincial Treasury is the use of financial education as a way of expanding social and economic opportunity for all citizens in KwaZulu-Natal (KZN). To this end the KwaZulu-Natal Financial Literacy Association (KZNFLA), established last year under the auspices of Provincial Treasury, is a real win-win partnership between government and the private sector. With 72 participating entities to date, ranging from private sector entities, parastatals, regulatory bodies, academic institutions as well as government departments, the footprint of financial literacy has been extended in our province by sharing resources, expertise, passion and enthusiasm. The KZNFLA focuses on five target groups, namely: Women & Vulnerable Groups; In-School Youth; Out of School Youth; SMMEs and Government employees.
Achievements and plans for 2012:
- Know your money – Yazi imali yalho: Financial Education Newspaper for Government Employees in KwaZulu-Natal
- Training of Youth Ambassadors
- Surveys on the levels of financial literacy in households
- Extension of the Grade 11 Speech Contest on Finance from two circuits to all education districts
- Increasing Financial Education Training Workshops for government employees, including teachers
- Expansion of Teach Children to Save, South Africa in KwaZulu-Natal
- Membership (Provincial Treasury) of the International Network for financial education of the OECD.
- Promoting financial literacy - Taking financial education to the people: A Conference on Financial Education and Financial Literacy: 3 – 4 July 2012
- "Wise" festive spending campaign
- Training workshops for SMMEs; and
- Partnership with savings groups and self-help groups.
Operation Sukuma Sakhe
As part of our commitment to service delivery, the MEC and the HoD as well as senior management and other officials of the department are participating in Operation Sukuma Sakhe, led by the Office of the Premier.
Awards of excellence
The offices of the Chief Financial Officer and the Human Resource Manager play vital roles in ensuring good financial and human resource practices in the department. These components must ensure that the Provincial Treasury leads by example ensuring excellent financial management and human resource practices. As the recipients of the gold award from the Office of the Premier in 2011, we can truly say that our human resource directorate has been excelling. The Office of the CFO also won an excellence award in 2009/10.
Bursaries and Training
This programme also funds most of the Treasury budget for bursaries and training. We will be spending some R530 000 on bursaries, R1,321 million on formal training and R1,9 million on the internship programmes. At present the Treasury has admitted 41 interns in terms of the internship programme. In addition there are currently 47 learners in learnerships at the department.
Programme 2: Fiscal Resource Management – R83,807 million (up from R72,236 million)
The main purpose of this programme is the effective management and monitoring of the Provincial and Local Government Fiscal Resources and Budget processes. The achievements of the teams responsible for these functions are commendable and play vital roles in the continued improvement of fiscal stability in the province. The Public Finance unit was acknowledged for their excellent work with a silver award from the Premier in 2011. The budget office will in future ensure even more involvement of the Provincial Treasury in the budget processes and reporting requirements of Public Entities.
The sub-programmes: Public Finance, Economic Analysis and Infrastructure Development will continue to provide an informed and well-researched fiscal framework for the allocation of resources and the monitoring of expenditure trends against the appropriated funds.
Honourable members are well aware of the vital importance of this, culminating in the preparation of the Estimates of Provincial Revenue and Expenditure which members will be debating during the present sitting of the Legislature.Section 18 of the PFMA requires the Provincial Treasury to “exercise control over the implementation of the provincial budget,” as mentioned above.
This will be achieved by the in-year monitoring of departments’ and public entities’ spending levels in the form of the monthly In-year Monitoring (IYM) reports to the National Treasury and the Provincial Cabinet. This is a vital early warning system that informs the Executive of possible over-spending or under- spending by the provincial departments throughout the year.
This unit also assists the Provincial Legislature in its oversight role over provincial departments and entities through the preparation of mid-year and close-out reports which are tabled before the Finance Portfolio Committee.
An area of growing importance is the monitoring of non-financial targets through the Quarterly Performance Report which provides a useful platform for government to evaluate the services for which it has allocated funds.
This unit is also responsible for the monitoring of the fiscal austerity measures which were first introduced in 2009/10 and which have become the norm in KZN with departments and public entities being urged to re-direct any savings realised from these measures back into areas of service delivery for the benefit of the people of KwaZulu-Natal. Indeed KwaZulu-Natal has become an example to all other provinces when it comes to the fiscal austerity measures.
Having said this though, I have to reiterate that the cost-cutting measures implemented in this province are not a once-off initiative to control costs, but should be viewed as basic elements of good governance that are here to stay. There are unfortunately signs that some departments and entities are slipping back into bad habits, and Treasury will carefully monitor the situation to ensure compliance. We will not allow our province to slip back to where we were just a mere two years ago!
The Provincial Own Revenue unit will be conducting continuous assessments of the revenue generation and collection capacity of all KZN departments and assist them to enhance their revenue collection where necessary.
The Provincial Treasury established during 2011/12 a panel of infrastructure experts covering all disciplines in the planning, designing, construction, monitoring and maintenance of infrastructure projects. This is a transversal panel and it is available for utilisation by all departments and municipalities under the supervision of Treasury.
This team will continue to gain importance and relevance. A large number of such experts have already been allocated to departments and further allocations are in the process of being finalised.
Through this exercise we will have expertise readily available to assist and ensure value for money and on-budget spending of our Infrastructure allocations. However, we point out that this is a temporary intervention to allow departments to strengthen their capacity and it is envisaged that the intervention will end after three years.
The Economic Analysis unit determines and evaluates the economic parameters and socio-economic imperatives to inform provincial resource allocation. The unit also supports municipalities through regional economic analysis. The unit plays a significant role in the economic development of the province through its involvement with other departments in inter alia the following projects:
- Upgrading of the Pietermaritzburg Airport
- Upgrading of the Ulundi Airport
- Upgrading of the Richards Bay Airport
- The KZN Red Tape Study
- KwaZulu-Natal Business Barometer
- King Shaka Auto and Lifestyle Precinct Development.
The unit will be involved in the planning and possible upgrading of a number of other regional airports during 2012/13 which may include Newcastle, Margate and Durban (Virginia) regional airports.
This Unit also houses the Municipal Finance Programme (MSP), which gives effect to the duties and functions assigned to Provincial Treasury in the Municipal Finance Management Act (MFMA). This unit will continue to focus on improving the technical support it provides to 58 delegated municipalities in the preparation of multi-year budgeting thereby enhancing their ability to meet their obligations to provide basic services.
Whilst the Municipal Support Programme (MSP) has had a positive impact on the financial management of the municipalities this remains an area that needs more attention if we are to ensure improved service delivery to ordinary people. It is at this level of government where the real differences are made to the everyday lives of the citizens of this province.
The MSP will implement the following work streams in addition to the basic level of support offered to municipalities during 2012/13:
- Improving cashflow management
- Improving the control environment
- Improving Information Technology general controls
- Focus on sustainability; and
- Improving Financial Management.
In addition the Provincial Treasury has deployed resource personnel to a number of municipalities where assistance was requested or where intervention was required.
The MSP has had a positive impact on the financial management of municipalities as is evident in the improvement in the overall audit outcomes:
Programme 3: Financial Management – R238,345 million (down from R262,595 million)
Summary for the Province: Audit Outcomes
|Financial unqualified (with other matters) ||47 ||53 ||43|
The decrease in the allocation to this programme is directly due to the reduction in the cost of servicing the cash provision for the province, i.e. we now earn interest as opposed to paying interest on overdraft! Although the reduction is reported under this programme the success of the turnaround strategy is a direct result of the teamwork of the Public Finance and Financial Management units.
The Executive is informed simultaneously on a monthly basis of the In Year Monitoring reports of departments as well as their actual cash positions, which results in greater oversight by the Executive over departments. As a bonus the estimated own revenue from interest has increased from R6,7 million in the last financial year to R185 million in 2012/13.
The purpose of the Financial Management programme is to ensure effective and efficient management of the provincial and local government’s physical and financial assets. It is responsible for ensuring that norms and standards for financial management and supply chain management are in place. The team plays a major role in building the capacity of institutions to ensure sound financial management practices in the province.
The Provincial Treasury has adopted a “Back to Basics” financial management approach to address audit risks and negative audit outcomes. This approach comprises the following key elements:
- An analysis of basic financial management processes and procedures, Identification of audit risk areas and key internal control measures to mitigate potential risks,
- Sustainable skills transfer, training, and the monitoring of key controls and procedures to address audit risks and key control deviations.
The Financial Management and the Internal Audit units will in future complement each other by both proactively identifying and addressing key financial management risks. A key area for the 2012 audit is the accuracy of the Annual Financial Statements and the sign-off by the Audit Committee.
The following special areas of concern will require proactive intervention in 2012/13 to ensure clean audits in 2013/14:
1. Immovable Assets
The Treasury will continue to assist the Department of Public Works in the completion and updating of the immovable assets register and compliance with the Government Immovable Assets Management Act.
2. Irregular Expenditure
One of the major risk areas facing Departments and Public Entities is the quantum of irregular expenditure. Treasury is presently analysing the main causes of irregular expenditure and, where appropriate, considers condonation requests from departments. The outcome of this exercise will be discussed with both the Auditor General and the relevant departments. The analysis includes the clarification on the application of certain regulations and practice notes in respect of irregular expenditure. A report to the Executive and the Provincial Public Accounts Committee in this regard will be finalised by the end of June 2012.
3. Operation “Sikhokha Ngesikhathi - We pay on Time”
During August 2011 the Premier requested that the Provincial Treasury set up a system to deal with complaints from service providers regarding the non-payment or late payment of accounts by Provincial Departments. On 1 September 2011 Operation “Sikhokha Ngesikhathi - We pay on Time” was established. A total of 100 complaints involving 239 invoices amounting to R21 million have been received by the Payment Queries Helpline since the launch.
Of these, 72% of the complaints have been resolved by the team. We have established a liaison mechanism with organised business to assist with communication with service providers regarding the facility, but also to create awareness of the need to follow due process such as the necessity to obtain an official order for services.
4. Reduction in government debt to municipalities
Although the special task team has completed its initial mandate, it has become clear that the situation should be carefully monitored to ensure that arrears in certain areas do not occur again. The original provincial arrear debt of R466 million has been reduced to R86 million of which some R40 million is current.
The remaining R46 million relates to rates levied against Human Settlements and services to section 21 Schools. The task team is working with the responsible departments to resolve the challenges. We will also in 20012/13, concentrate on the improvement of our systems as well as the billing systems of some municipalities.
5. Tracking tool and working paper file
The Provincial Treasury has developed both a tracking tool and audit working paper file to be rolled out to all municipalities. The overarching concept of these tools is to monitor key financial management processes and reconciliations. This should enable CFOs and finance staff to flag risks and address errors timeously.
The tool has already been introduced into 20 municipalities but there seems to be a lack of proper monitoring by certain CFOs and certain municipalities have only implemented parts of the tool. Provincial Treasury therefore established a dedicated task team to review the various reconciliations and ensure compliance with these tools.
Two years ago and repeated last year, I quoted Minister Gordhan in regard to Supply Chain Management and I do so again:
“A major site of both wastage and inefficiency is in our procurement system. Through a combination of corrupt practices, inefficient procurement, poor planning and in some instances, collusion by the private sector, we are not getting the kind of value from our purchases that our people deserve.”
It is of great concern that the irregular expenditure analysis revealed that more than 90% of the irregular expenditure identified in the Financial Statements of departments and public entities relates to breaches of supply chain management prescripts.
Although some of these cases relate to interpretation issues and capacity constraints, the system and controls needs to be enforced vigorously. A growing concern to Provincial Treasury is the serious lack of capacity in Supply Chain components in certain departments requiring Treasury’sdirect assistance and intervention.
We will continue with the SCM initiatives and projects commenced in 2010/11, namely:
- Continued and comprehensive compliance assessments of departments, public entities and municipalities.
- The continuous further updating of the new Provincial Supplier’s Database, which was finalised in June 2011, to ensure compliance by service providers.
- The implementation of an effective contract management system to actively monitor and manage contract performance by Departments. Substantial progress has been made with the pilot projects in identified departments and municipalities.
The Minister of Finance also announced in his 2012/13 Budget speech that the National Treasury has already issued new instructions which require departments to submit annual tender programmes, limit variations to orders, and disclosures of all deviations. The Provincial Treasury will enforce these additional control measures rigorously.
Most of our Municipalities do not have proper functioning SCM systems as required by the MFMA and municipal policies. This is hindering our efforts in ensuring that the Municipalities are fully compliant. Direct assistance with policy and the establishment of an appeal management process is being undertaken by the unit and are at an advanced stage of implementation.
The Public Private Partnership Unit housed in this programme, provides technical support on any possible PPP project envisaged by Departments, Public Entities and Municipalities. The unit, in collaboration with the National PPP unit, is presently assisting a number of municipalities in projects ranging from office accommodation to water reticulation.
Also included in Programme 3 is an allocation to the sub-programme: Supporting and Interlinked Financial Systems. These funds are mainly for the transversal financial systems utilised by the province.
I am pleased to announce that the Biometric Access Control System (BACS) project is now fully operational for all BAS and PERSAL users. The linking of the system to Hardcat, the provincial assets management system, is almost complete and will be fully operational during 2012/13. This will effectively eliminate the password access control challenges experienced previously. We are the only province that has implemented such a system.
Programme 4: Internal Audit – R93,619 million (up from R89,270million)
The Internal Audit Branch remains one of the most important vehicles the province and its Accounting Officers can utilise to promote good governance and to combat fraud and corruption. The Assurance component is increasingly visible in all provincial departments and will be an important vehicle to promote clean audits. Good communication between the component and departments will ensure corrective action before identified challenges become external audit queries.
Close liaison between Assurance Services and the Financial Management component in the Provincial Treasury will also assist in timeous support being given to Departments. As with many prescripts some of our officials do not act on, and in some cases even ignore, these reports and its findings and this unfortunately appears to be an increasing trend.
The new Provincial Internal Audit Committee has already addressed these issues with departments. I am convinced that their dedication to the process will improve the compliance and performance of departments.
Despite some capacity constraints the assurance component is maintaining a 90% completion rate of its annual operational plan and will continue to improve its performance.
The internal audit function has been realigned to the government clusters, which is aimed at enhancing the effectiveness of reporting and improve on the quality of decision making relevant to each cluster.
The Quality Improvement Programme (QIP) of the Internal Audit Unit is continuously being reviewed to ensure quality excellence. The aim of QIP is to improve the services, offered to client departments and includes the following:
- Peer reviews of internal audit projects.
- Independent External Quality Assurance Reviews.
- An assessment of the effectiveness of the Provincial Audit and Risk Committee.
- An assessment of the effectiveness of the functioning of the Internal Audit Unit.
- Compliance with all prescripts governing the functioning of the unit with special emphasis on the International Standards for the Professional Practice of Internal Auditing.
The Risk Management component has made good progress in supporting a culture of effective risk management by promoting continuous awareness through focussed strategic and operational risk assessments. The challenge that confronts the component is to obtain real commitment of Departments to manage their risks rather than paying mere lip service to it.
The function of risk identification and management is a departmental function, and will increasingly be devolved to departments to allow the Risk management component to concentrate on the monitoring and evaluation function, but only once there is a true understanding and commitment from departments to carry out this obligation.
The Risk management component is currently implementing the Municipal Risk Management Framework to raise awareness and equip municipalities to enhance their risk management responsibilities. The unit is also in the process of streamlining risk assessments to develop consolidated risk profiles that will be handed-over to provincial departments for own maintenance. The component will assist departments to modify the provincial risk management framework according to their specific needs.
The province has adopted a culture of zero tolerance to fraud and corruption and the Forensic Services component plays a vital role in this difficult and challenging field. It collaborates with organisations within the forensic fraternity to identify and investigate a variety of fraud and corruption activities concerning provincial departments and entities.
It must be emphasised that it remains a departmental responsibility to act on findings and recommendations once an investigation has been conducted. The forensic services component will however provide support and where required provide and lead evidence.
The unit focuses on pro-active and preventative strategies of combating IT fraud and corruption. Since the implementation of the programme no new cases of external manipulation through our systems have been reported. However, we remain vigilant and follow up any suspicious activity that is reported.
To improve on its forensic services, the unit is undertaking the following:
- All vacant posts have been advertised and filled, and the incumbents are in the process of being trained to levels of excellence.
- The Forensic Investigation Division is currently being restructured to accommodate additional senior management posts and to establish the Forensic Investigation Division as a “standalone” division. There is a three-year plan to appoint further personnel within the division so that the division becomes less dependent on outsourcing investigations and becomes more self-reliant.
- Regular meetings are held with law enforcement agencies and relationships have been forged to ensure co-operation to secure successful prosecutions.
Programme 5: Growth and Development – R88,409 million (up from R46,062 million)
The increase in the allocation to this programme, is mainly as result of a R40 million allocation for Strategic Cabinet Initiatives mentioned above and R2 million for airshows approved as part of the tourism drive of the province, in collaboration with the Department of Economic Development and Tourism. Included in the allocation is the funds provided for the finalisation of the upgrading of the Pietermaritzburg, Ulundi and Richards Bay regional airports.
Impact of the budget for the 2012/13 Financial year
The budget of Provincial Treasury for the 2012/13 financial year as indicated in the Estimates of Provincial Expenditure for 2012/13 has been increased from a total of R536,486 million to R604,2740 million mainly as a result of the special allocations made for the upgrading of the regional airports and the strategic cabinet initiatives.
The savings in the cost of servicing the cash provision will be utilised to fill vacancies and provision of additional support to departments, public entities and municipalities. It is a healthy budget which will greatly assist Treasury to continue funding a number of important projects in which it will play a role during 2012/13 to further enhance good governance and service delivery:
- Firstly, the finalisation of the Immovable Assets Register by the Department of Public Works
- Secondly, the finalisation of the Municipal debt project and operation “We pay on time;”
- Thirdly, the provision of assistance to the Department of Education to resolve the challenges relating to payment to municipalities by certain section 21 schools
- Fourthly, the expansion of assistance to municipalities
- Fifthly, continuing Operation Clean Audit; and
- Lastly, the implementation of the SCM reform initiatives.
With this budget and with an expected complement of 460 staff, the Provincial Treasury can and must continue to address the remaining financial management challenges facing the province as a whole. We can and must continue to assist and encourage all departments, public entities and municipalities within the province to wisely and effectively spend their funds for the benefit of all the people living within KwaZulu-Natal.
I trust that with our commitments as set out in this address you will support the 2012/13 budget of R604,274 million for vote 6, Provincial Treasury.
It is now my honour to formally table this budget for your consideration.
Issued by: KwaZulu-Natal Provincial Treasury
1 Jun 2012
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