KZN Mid-Term Budget: Failing ANC has no plan

20 November 2018

KwaZulu-Natal will not see change management within its provincial government Departments until such time as the current failing ANC leadership is removed at the ballot box.

This was evident during the Auditor-General’s provincial audit outcomes for 2017/18, followed by KZN Departmental Mid-Term budget hearings by the Standing Committee on Public Accounts (SCOPA). The outcome saw a deterioration during the 2017/18 period, with the main contributors cited as:

Non-compliance with law and regulations;

Material misstatements in annual financial statements;

Large amounts of irregular expenditure;

Dismal failure and disregard for supply chain regulations and;

Officials doing business with government.

The hearings also found, amongst others, capacity constraints, poor consequence management, non-accountability and non-compliance to be the key issues within Departments.

The Mid-Term Budget hearings are once again proof of a collapsing province, as a result of the lack of political will, ultimately leading to a lack of accountability. The non-existence of a capable state is due to one simple factor, the failing ANC talk’s right and walks left along with the fact that it continues to do the same thing again and again while expecting a different result.

This is also why KZN - since the start of the current parliamentary term - has had to launch a staggering 301 forensic investigations across all Departments and entities. Of these, only 149 have been finalised to date. Of that, just 49 have resulted in disciplinary hearings and a miserable 15 resulted in criminal cases being opened. This is less than a 50% success rate in accountability and consequence management, when officials are being charged with fraud, corruption, financial misconduct, procurement and supply chain management irregularities.

With the mid-term budgets concluded, the biggest challenge now facing KZN is a year over-expenditure of R123.6 billion versus a budgeted R122.4 billion. This R1.2billion over-spend is unprecedented. Compounding the problem is that KZN is currently sitting on cash reserves of just R174 million – way below the normal R600million ‘financial cushion’ in the event of crises in the province.

Yet earlier this year in her Budget Speech, Finance MEC Belinda Scott stated that Departments would be effecting budget cuts of R475 million ahead of this month’s adjustment budget in order to bring contingency reserves back to R650 million. There is no sign of this in the mid-term reports.

Then there are the Departments that make up the bulk of this projected over-expenditure:

Public Works at R320 million;

Transport at R200 million and;

The biggest offender, Health, with a massive R500 million.

The question that needs to be asked is - why has no action been taken against these Department’s and in particular their political leadership? Instead, we have a state where officials suspected of fraud, corruption and or financial misconduct are allowed to resign and walk, often being re-employed into the state in some other capacity.

The sad reality is that KZN’s people are suffering the consequences of not having a capable state - in particular the poorest of the poor, the unemployed and the destitute.

If KZN is to avoid the dark abyss of additional external funding then this failed ANC government must heed the DA’s many warnings and ensure that Departments operate within their budgetary constraints.  Change can only be achieved through the creation of a capable state, founded on a bedrock of political will and based on equality, efficiency, competency and accountability.

That bedrock is the DA, the 2019 election will afford the citizens of KZN that opportunity to not only bring about change, but real change that will improve the lives of everyone.

Issued by Francois Rodgers, DA KZN Spokesperson on Finance, 20 November 2018