BHISHO OVERSPENDS BY R1-BILLION: WEEKEND POST

THE Eastern Cape government has overspent by almost R1-billion on staffing during the first six months of the financial year, meaning that personnel costs are now running at a whopping 80% of the total provincial budget.

Following the announcement, made to the Finance Portfolio Committee this week, that R889-million had been overspent, DA Finance spokesman Bobby Stevenson said the “dangerous trend” meant that increasingly more and more was being spent on personnel and less on service delivery.

The main culprits when it comes to over expenditure on employees are the Health Department, which is already R388-million over budget, and the Education Department that is R597-million over budget.

Stevenson said what was “truly alarming” was that as the province continued to spend more money on personnel, “we continue to underspend on capital”.

“People are paid to spend the capital budget but they are failing to do so as there are no consequences for non-performance”.

The Heath Department had underspent on its capital budget by R168-million by the end of the second quarter while the Education Department was R350-million underspent against budget.

Stevenson pointed out that in the last financial year Health had spent only 50% of its capital budget and Education just 33% and it was clear the situation in 2010/11 was “set to repeat itself”.

“As with last year the outcome is that the Eastern Cape will not overspend or have an overdraft at the end of the financial year because overspending on personnel and other current costs will be offset by underspending on capital projects.

“This province cannot continue to engage in smoke and mirrors accounting. The books may balance but in the long term our infrastructure implodes,” Stevenson said.