GAUTENG HEALTH HAS R2.5 BILLION OVERDRAFT

The Gauteng Health and Social Development Department has a bank overdraft of R2.5 billion. This is revealed in a written reply to my questions by MEC Ntombi Mekgwe. It is an astounding figure that has built up over the years due to overspending and unauthorised expenditure.

It was as high as R3.25 billion in January this year, but was reduced by R750 million that was written off with the passing of the Unauthorised Expenditure Bill. We are lucky that no interest is charged on the overdraft as it is pooled with other provincial money that enables a net credit balance for the Exchequer Account as a whole.

According to Mekgwe: "The department continues to work with the Department of Finance in monitoring the expenditure based on a monthly cash allocation. In terms of the process of monthly cash allocations, cash is ring fenced for the payment of salaries, payment of conditional grant suppliers and then only normal suppliers of the department."

The problem is that suppliers come last and are owed about R1.2 billion in total. Some suppliers are refusing to deliver to hospitals because they have not been paid, and small businesses face bankruptcy.

It's terribly unfair and in fact illegal under the Public Finance Management Act that requires payments within 30 days. Things will deteriorate unless National Treasury bails out this department, but this should only be done when strict financial controls are in place so that more money is not wasted.

Statement by Jack Bloom MPL, DA Gauteng Health Spokesman, April 4 2011

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