Honourable Speaker, Honourable Premier and protocol observed, allow me respond to reports submitted by the Office of The Premier.

Honourable Speaker, the Office of Premier must be commended for receiving an unqualified audit outcome for the financial year 2010/11. However, there are matters of emphasis, that were also observed, and which relates to:

• Irregular expenditure and

• Under-expenditure.


Honourable Speaker, material non-adherence to regulations as well as poor internal controls with respect to financial management and expenditure management were also reported by the Auditor General. In the statement of its Vision and Mission, the Office of the Premier aspires to be a leader in excellence at the centre of a coherent pro-poor provincial administration, and it also ensures responsive, integrated and sustainable service delivery to all in the Eastern Cape through strategic leadership, critical interventions and coordinated effective provincial government.

The Office of the Premier must therefore lead by example and walk the walk and talk the talk with reference to exercising good financial management systems and also to set an example for the whole province in its efforts to achieve the 2014 target of clean audits.

Honourable Speaker, the Office of the Premier has incurred an under-expenditure of R5, 468 million, whilst a negative impact on the implementation of the Information Communication Technology (ICT) programme within the provincial government was as a consequence of financial and human resource limitations. The common belief is that funds not spent and service delivery delayed is equal to service delivery denied. Access to basic services and information by the people of the province is a right enshrined in the constitution. Even though the acceptable percentage of under-spending in accounting processes is 2%, this allowable percentage may amount to millions that have a potential to improve the lives of the poor.

Honourable Premier, the vacancy rate of the department currently stands at 21.9 %, which marks an increase of 6% compared to the previous financial year. The staff shortages encountered in the Risk Management unit, includes operating without a Senior Manager from as early as the beginning of the financial year. The non filling of this most important position has compromised the unit’s capacity to implement risk management. Section 3.2. of the PFMA impresses on the Accounting Officer a must to ensure that risk assessment is conducted regularly to identify emerging risks of the institution.

Honourable Speaker, despite the high rates of vacancies, departments have displayed over-expenditure with regard to the compensation of employees. This means that either some posts had not been budgeted for, or the personnel in the department are being paid above the norm. It seems that unregulated extras such as bonuses and overtime payments are indiscriminately been paid, which have not been budgeted for. Honourable Speaker, most of the departments are transferring funds from the non-consumable budgets in the personnel budgets to irregularly prevent over-expenditure on the personnel budget. This is indeed indicative of poor planning within departments.

The consistently high levels of virement and shifting of funds is indicative of poor alignment of the budget to the operational plans at planning phase. Even though these mechanisms were designed to be interventions in cases where unforeseen circumstances arose during a given financial year, they have become a common operational activity.

Honourable Speaker, the Office of the Premier did not achieve its target of placing 2 400 unemployed youth in relevant work-based learning programmes through apprenticeships, learnerships and internships. Only 209 learners participated in strategic skills development programme. This is against the background of severe lack of critical skills in the province like town planning and civil engineering. According to the South African Institute of Race Relations, youth unemployment rate (i.e. ages between 15 and 24 years) in the country currently stands at 51%, which is more than double the national unemployment rate of 25 %. The youth unemployment rate varies considerably between the races – the highest being 57 % in Africans and the lowest of 15% being recorded in Indian men, at 15 percent. The survey also found that the average job created by a government programme lasted just 46 days. Of concern is the fact that, the longer young people remain unemployed, the more unemployable they become.

Lastly, Honourable Speaker, The Office of the Premier failed to meet the targets it set with regards to the establishment of the Provincial Planning Commission., The long-term planning function has been transferred as a unit in the Provincial Treasury, and to date the Planning Committee has not been established yet. The province is dragging its feet regarding finalisation of the Provincial Planning Commission and this will delay the implementation of the recently released National Development Plan which seeks to address social-economic challenges which include poor economic growth, high unemployment and pervasive poverty, by 2030. The department needs to expedite the establishment of the Provincial Planning Commission as other departments need to reconfigure their planning processes and taking a cue from the provincial planning.

The Democratic Alliance supports the report.


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