Unauthorised expenditure occurs when a department either
(a) Overspends the voted funds in the programme or within the department or
(b) Spends funds not in accordance with the mandate of the Department of a particular programme within the Department.
One of the issues that I want to highlight which is raised on page 85 of the report, is the unathorised expenditure as at the 31st March 2010 for the Department of Health.
This Department incurred unauthorised expenditure amounting to R874 277 000 during the year under review. This amount was incurred as a result of the Human Rescources Operations Project Team (HROPT) payments which were not a funded mandate.
When I first raised this issue in the committee under the Administration of the previous SG, I queried how the amount for HROPT was paid out, I was informed that the Department only knew the exact amount that was paid out when they pushed the button. This is indeed reckless financial management.
The whole manner in which the HROPT process has been handled is a shocking indictment of the financial management of this Province. On the 18th October 2006, the exco passed a resolution that said that employees who have genuine and justifiable cases with regard to promotions and pay progressions should submit such claims to their Heads of Department for thorough scrutiny.
What should have happened is that independent auditors should have been appointed to check and verify the amounts that were going to be paid prior to payment. This did not occur.
On the 1st April 2009 there was a meeting held at the office of the Premier between the Premier, MEC’s and HOD’s of Agriculture and Health and the NEHAWU Provincial Leadership. A decision was taken to pay HROPT as per the agreement with the Unions. These payments then started in April 2009 before a proper verification process could take place.
Now the reason why the decision was taken then to pay people was purely political. This was during the course of the 2009 general election and pressure was put on the Provincial Administration to pay or otherwise lose support so they paid. Sound Administration gave way to political interference.
Today we are sitting with a massive problem as a result of this payment of HROPT money. We were informed that because of the accruals in the Department of Agriculture relating to the R126 million that they paid out, that there is a possibility that they will not be about to fully carry out their mandate this year due to a lack of funds.
We are also fully aware of the catastrophic effect this payment has had on the Department of Health.
In numerous recommendations in this report, the committee recommends that disciplinary action needs to be taken in terms of the Public Finance Management Act. It is important that this committee actually receives the report backs from the Departments as to how these recommendations in relation to taking disciplinary action are actually implemented. Until disciplinary action is taken against officials contravening the Public Finance Management Act, we will not get our financial house in order in this Province.
A further issue I wish to touch on is the additional work that is often done for National departments – the so called unfunded mandates. When Departments are requested to do additional work where no funds have been allocated and there is a promise of funding from National, it is important that these agreements are put in writing so that there can be no dispute afterwards.
Our ability to manage our financial affairs efficiently and effectively has a dramatic impact on how this Province is governed, how services are delivered and how it’s administration is perceived. Investors tend to be attracted to areas where the administration is best. This, in turn, influences employment opportunities. It is within this context that one should view the recommendations of the committee’s report. Where there is poor financial management, you get poor service delivery and poor job opportunities.
The Democratic Alliance supports this report.