Underspending by departments: KZN government stands to lose over R600 million

2011-09-09 00:00

THE provincial government stands to lose over R600 million in conditional grant allocations due to underspending by most departments and more than R2,7 billion in equitable share in the 2010/2011 financial year, KwaZulu-Natal Legislature’s finance portfolio committee chairperson Belinda Scott revealed yesterday.

Presenting her report on the 2010/11 preliminary close-out budget performance for the province, Scott said it worrying that the conditional grant allocation of the province has been underspent by R636,586 million in aggregate, which could be returned to National Treasury.

Conditional grants are given to different departments to be used for specific purposes, and grants that are not used are returned to the National Treasury, which in turn reallocates them to provinces that can use them.

The chairperson said the conditional grants that reflected under-spending included the hospital revitalisation grant, the national school nutrition programme, the devolution of property rate funds grant to provinces, the comprehensive HIV and Aids grant and the infrastructural (health) grant to provinces.

She added that after excluding all projected underspent conditional grants, the underspending against the provincial equitable share is closer to R2,7 billion for the 2010/11 financial year.

The preliminary provincial expenditure for the 2010/11 financial year amounts to R67,7 billion of the final appropriation of R71,1 billion, resulting in the underexpenditure of R3,4 billion.

“All departments underspent their 2010/11 budget allocations, with the exception of the Department of Transport, which was minimally overspent by R19,5 million,” Scott said.

During the debate on the report before the legislature, speaker after speaker from opposition parties condemned the provincial government’s departments’ growing trend of underspending. They said this tendency puts residents of the province at a disadvantage.

In June this year most provincial departments were hauled before hearings by the committee after the Provincial Treasury revealed that it was projecting significant over or underexpenditure for the 2010/11 financial year.

Scott said that one of the major concerns raised by the committee in the close-out hearings were high levels of staff vacancies and delays experienced by many departments in filling critical vacant posts

Another concern was the significant levels of underexpenditure in infrastructure spending by key service delivery departments.

Many departments have failed to spend their extended public works programme grant for the infrastructure sector, Scott said.

skhumbuzo.miya@witness.co.za

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