Report reveals failure to spend R63m

The KwaZulu-Natal department which oversees service delivery at municipalities in the province underspent R63 million of its budget last year.

Durban - The KwaZulu-Natal department which oversees service delivery at municipalities in the province underspent R63 million of its budget last year.

Delays in filling vacant posts and slow spending on the 2016 local government elections programme were mainly to blame, according to a report on the Department of Co-operative Governance and Traditional Affairs (Cogta).

The department also failed to spend its capital (infrastructure) budget by R21m, it said.

The information iscontained in an unaudited closeout report for the province, tabled in the legislature this week.

The report also noted that the department transferred more than R272m to municipalities over a five-month period, which observers say amounted to "fiscal dumping" - getting rid of money before the financial year ends.

Of the R272m transferred, the municipalities had only spent R47m (17.2%) as of March 31 this year. A total of R225.880m had not been spent.

"Although the municipal financial year ends in June, it is doubted that such a significant amount could be spent in the three remaining months," the report said.

"This could be attributed to the fact that the department transferred the bulk of the funds between November 2015 and March 2016, making it difficult for the municipalities to be able to spend the full funding."

According to the report, slow spending on local government elections, on services such as the provision of water, electricity, sanitation and municipal roads near two voting stations was because of the late announcement of the election date.

The DA, the official opposition in the KwaZulu-Natal legislature, called the underspending "criminal" and said the department needed to be completely overhauled.

George Mari, the DA's Cogta spokesman in KZN, said the underspending was likely to balloon because unaudited findings were usually lower than the audited findings.

"This underspend tells an alarming story. KZN's ANC-led Cogta department is the delivery arm of municipalities in the province. Any under-expenditure is criminal," Mari said. He said the excuses contained in the report for underspending were unacceptable when many communities were still without proper infrastructure or services.

"KZN's Cogta department needs a complete overhaul if it is to start delivering properly. This includes a re-engineering of the department so that it has improved internal capacity, minimising the use of outside consultants.

"The DA expects MEC Nomusa Dube-Ncube to make changes so that this level of under-expenditure does not happen again. If the MEC fails to treat the matter with the seriousness it deserves, the DA will write to KZN's Treasury and call for an investigation into the shortfalls within this department," Mari said.

Lennox Mabaso, spokesman for Cogta, said the department had spent 96% of its budget.

"Which by far is considered very good, but not excellent. Cogta regrets the fact that we could not spend the remaining 4% owing to issues beyond its control in certain areas.

"It is for the first time in many years that Cogta is registering an underspend in its budget," Mabaso said.

He said the underspend was because of a "unique year of transition in local government" and that the department was impacted by a number of "unforeseen changes in the environment".

"We have provided reasons to the provincial government and the portfolio committee and everybody understood the issues were beyond the department's control, hence the department is not losing the money, but it will continue to spend it on its drought-alleviation programmes.

"It must be noted that all monies earmarked for critical development initiatives were spent accordingly, hence the department received a positive unqualified audit report even from the auditor-general.

"The DA which sits on the committee is deliberately distorting and sensationalising the report as part of its political propaganda to scandalise all that the government does and to create media frenzy from many media institutions who unwittingly become their hired guns," he said.

Advocate Paul Hoffman, director for the Institute for Accountability in Southern Africa, said any government department that failed to spend its budget could be accused of maladministration.

"The reason for this is because the taxes that are paid by poor people through VAT or workers through income tax or by businesses through company tax makes up the pot (for the) budgets of the various state departments.

"It is public money that they are spending on behalf of the public," he said.

Hoffman said any government department that failed to spend its budget was falling foul of the Bill of Rights which protected citizens' rights to access to services.

"Failure to spend budgeted money is in the final analysis a case of maladministration worthy of investigation by the public protector and a potential threat to people's human rights that is guaranteed in the Bill of Rights," he said.

Daily News