One of the issues highlighted in the report is a turn-a-round strategy for the Departments of Health and Education. We have had endless turn-a-round strategies for these two Departments which together comprise 75% (R36 billion) out of the R48 billion budget. Whereas it is important to work tirelessly to improve systems and one encourages the Provincial Treasury in that regard, one wonders to what extent this action will be successful.
Is it a case of tinkering with systems when we actually have a people problem? There is something rotten at the core of these two major departments, something very rotten. Let me give you an example – last year R400 million was paid out in backpay in theHealth Department (HROPT Process). This money was not budgeted for, and even worse, it was not properly costed before it was paid out. Only when the button was pushed did they know how much money went out of the Department. Has anyone been disciplined? Has anyone been charged? Has any money been recovered?
It is now time for drastic action to deal with these Departments.
Unless the right financial systems and the right people are in place to deal with over expenditure, the Province’s finances will be completely derailed this year.
Last year there was in the region of R2.8 billion over expenditure with R2 billion needed to be top sliced from next year’s budget (2011/12). If Health and Education again overspend by R2 billion, they will plunge the Province into a financial crisis. Any increase in our equitable share next year will be completely swallowed up by over expenditure this year.
The Director General of Health has made it clear that there needs to be an additional R2.9 billion to balance the budget. Education’s budget is also not properly costed and will definitely overspend. One cannot even get clarity on last years accruals.
According to the Daily Dispatch of the 24th April 2010, the acting Superintendent General Prof Harry Nengwekhulu said the moral fibre of the Department was completely lost. He also described it as “rotten to the core”.
In the same article it was pointed out that 167 officials have yet to declare their business interests. It further quotes him as saying that 90% of Senior Officials in the Education Department were tendering with the Department. In one case an employee with 17 registered companies was doing business with the Department.
Another major problem was the existence of ghost employees – non existent staff who were put on the pay roll and had their salaries diverted to crooked officials.
Co-incidentally, according to the Public Service Commission report published in September last year, 167 of the 215 Senior Management Service members in the health department did not submit their disclosure forms before the deadline.
One of the ways of stopping the rot is to ensure that we have tender reform. According to the financial mail of the 21st May, unofficial estimates doing the rounds in Government circles is that South Africa is losing 20% of it’s procurement budgets each year through corrupt procurement. This entails rip-offs, over pricing and the failure of contractors to deliver what is promised. The goods and service budget for this Province is R9,154 billion. If we add R3.6 billion for capital projects we are looking at R13 billion of which R2.6 billion could be wasted. This is a frightening amount of money. One just has to look at the Daily Dispatch of March 20th where they exposed the rip-off saga of businesses tendering with the Province. In this article it is pointed out that ordinary ball point pens are charged at R20 while bookshops sell them for R5. Return flights to JHB from EL for R5 400 per ticket where a cheap ticket is R1 570. R26 for a loaf of bread and R80 for a bottle of correctional fluid, R100 for a bag of potatoes as opposed to R40. Clearly the Province is being ripped off by unscrupulous people. Have any of them been charged or blacklisted?
The charges that are being paid to Fleet Africa for vehicles are extremely high – R12 600 per month for a 1.3 sedan. Then there is also the impact of poor workmanship – when roads are washed away or houses collapse or leak, this too costs money when we have to engage rectification. We are now engaged of rectification of rectification with regard to houses.
The Department is taking steps to deal with the issue by developing a price index so when tenders are costed one can benchmark it against something but they must go after the people who have been ripping us off. If the central supplier database computerised system cannot expose those people involved in price rip offs then another system must be developed to do this.
Given the issues that have been highlighted in my speech, it is quite clear that we need a tender bill which outlaws the employees of the Provincial Government doing business witht he Province except in strictly defined and transparent circumstances.
I will be tabling a private members bill in this regard later on in the year.
To stop the rot requires political will and to charge those responsible for contravening the Public Finance Management Act.
It also means putting an end to the ANC factional politics in this Province that is consuming politicians and administrators. We have had 15 MEC’s in the last 6 years in the 4 key delivery departments of Education, Treasury, Health and Local Government. What this Province requires is stability.