Provinces pay for failing to spend

South Africans are being deprived of education, health services, roads and other infrastructure because their provincial governments seem to be incapable of spending their budget allocations.

This week, Gauteng made headlines after the opposition in the province’s legislature demanded an explanation for the R358 million which was cut from Gauteng’s budget alloca- tion by Finance Minister Pravin Gordhan. The minister made the cuts after the province failed to spend its money.

Other provinces seem to be equally incapable of spending the money allocated by the government on behalf of their citizens.

The statistics were published this week in the Treasury’s fourth quarter provincial budgets and expenditure report for the 2010/11 financial year.

In this financial year government allocated grants to the value of R34.6 billion.

But provinces spent only R32.1 billion (almost 93%) of this money on the needs of their citizens, depriving people of rural poverty relief, community libraries, HIV and Aids education, sports programmes and improved hospitals.

Grants with low rates of spending are:
» transport disaster management (63.9%).
» expanded public works programmes for the social sector (72.4%)
» hospital revitalisation (75.2%)
» technical secondary schools recapitalisation (75.8%)
» devolution of property rates funds (81.5%)
» HIV and Aids (life skills education) (87.4%)
» community library services (87.9%)
» forensic pathology services (88.1%)

Examples of people who were denied services because their provinces spent less than 90% of specific grants are children in KwaZulu-Natal, who did not fully benefit from the national school nutrition programme grant.

Communities in Limpopo, Northern Cape and North West have been deprived of community libraries.

The people of six provinces – Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo and Northern Cape – did not fully benefit from promise of improved hospitals to be funded by the hospital revitalisation grant.

And in the Eastern Cape and North West, provincial administrations neglected to spend their sport and recreation grants fully.

Apart from grants, provinces are also underspending on their capital budgets – the budgets which fund schools, hospitals, roads and the like.

Some of the most severe underspending this year occurred in the capital budgets for education and health.

Provincial education departments spent only R5.4 billion (86.6%) of their combined R6.2 billion capital budgets for education.

Provincial health departments spent only R6.7 billion (74.1%) of their combined R9.1 billion health capital budgets.

Provincial public works, roads and transport departments fared better. They spent R7.5 billion (95.8%) of their combined capital budgets of R7.9 billion.

Kenneth Brown, head of intergovernmental relations in the National Treasury, said new measures for efficiency in spending accounted for some of the underspending.

His department, in an effort to contain corruption and tighten and improve control over public money, has prescribed new processes and procedures to be followed by provincial administrations.

“Their quest for more efficient models slowed down spending by provinces,” said Brown.

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