SPEECH NOTES – BOBBY STEVENSON, MPL, LEGISLATURE LEADER, SPOKESPERSON ON FINANCE SPEAKING ON THE REPORTS FOR THE FINANCIAL YEAR ENDING 31 MARCH 2009 IN THE LEGISLATURE ON 21 JUNE 2011

Mr Speaker, hopefully this is the last year that we will be considering statements that go two years back.

The rules committee recently passed an amendment to the rules which states that the previous year’s financial statements need to be finalised by SCOPA prior to the new budget being introduced. This will make the work of SCOPA a lot more relevant and will also assist committees when they interogate the budget for the new financial year.

Recommendations which go back two years are often not seen as relevant by committees.

This report is a tragic indictment on the lack of administrative and political accountability that exists in this Province. Year in and year out the same issues continue to haunt the two big departments of Health and Education and nothing really changes.

Education has received a poor audit report since it’s inception and this is the 15th year that Health has received either a disclaimer or an adverse opinion. There is an expression “the more things change, the more they stay the same” – in the case of Health and Education, nothing changes and everything stays the same – if not getting worse. In fact, in the 2009 / 10 financial year, both Health and Education received a disclaimer which is a regression for both departments from the previous year where they got adverse opinions.

On page 131 of the report in relation to the Department of Health, it said that irregular expenditure occured during the year under review was under stated by R1.14 billion. The Department incurred irregular expenditure as a result of officials approving payments that exceeded their delegations and non adherance to supply chain management processes. This is totally unacceptable and disciplinary action needs to be taken.

The control environment in the Department of education is extremely weak.

On page 136 it says that the Department contravened the PFMA by omitting to disclose irregular expenditure of at least R1.5 billion in its annual financial statements.

On page 149 of the report it says that the Departments of Health and Education continue to be qualified on the same matters as in previous years.

On the same page, Departments failed to take disciplinary actions against officers as required in terms of Section 38 of the PFMA.

The question this house needs to ask is why, after all the reports and oversight work done by the committee, why does nothing change substantially. We cannot go on year after year sitting in meetings making findings and recommendations. This points to a failure of our oversight methods conducted by this house. It cannot be business as usual when it’s service delivery unusual.

The consequences of these bad audit reports are all clear for one to see. We currently have national intervention as far as Education is concerned. We all remember the IMT process (Inter ministerial task team) but nothing changed in the long term.

Nothing will change in these big departments unless we fire the rotten apples that are responsible for the poor administration. This takes political will and the enforcement of accountability.

There are a number of immediate steps that can be taken to fix the problem :

1. The MEC for every department should sign a performance agreement with the Premier;

2. A skills audit must be conducted of Senior Management in the Departments of Health and Education to determine whether or not people are fit for purpose. If they are not, they must be put on terms and dealth with.

3. The vacancy of the HOD of the Provincial Treasury needs to filled as a matter of urgency as it has been vacant for over two years.

4. Provincial Treasury needs to provide tough leadership so sound financial management is restored to this Province.

5. The provisions of the Financial Management Act need to be rigidly enforced.

6. There needs to be tender reform in this Province to ban civil servants doing business with the Province.

7. Treasury also needs to have a red flag unit that intervenes in departments early in the financial year and red flag certain issues that need attention so poor audit outcomes do not occur.

The bottom line is that poor administration and corruption eats away at our resources that are there for service delivery. This means that the poor of this Province continue to suffer.