KZN facing potential financial ruin as DoE runs up R1billion overdraft

25 October 2022

A SCOPA hearing with the KwaZulu-Natal (KZN) Department of Education (DoE) has exposed a dire fiscal mess which has the potential to ruin the province financially.

The hearing, held earlier today, revealed that the DoE has an overdraft of almost R1billion. This as a result of astronomical unauthorized expenditure, which now stands at R973 million.

Issues raised as contributing factors to the overdraft include;
- Inadequate oversight and monitoring on compliance and the contravention of PFMA regulations
- Poor budgeting, planning and coordination within the Department
- Escalating staff debt that the DoE is failing to recover
- Poor oversight and monitoring of expenditure and;
- A lack of consequence management within the Department.

The DoE’s finances are a major threat to the province’s economic sustainability. This while Provincial Treasury does not have the fiscal resources to bail the Department out.

With budgets cuts from National Treasury, KZN may well have to borrow money to keep the province afloat. This is a situation that must be avoided at all costs.

As a result of this, the DA has called on KZN’s Finance portfolio committee to convene a follow-up meeting with both the DoE and Treasury. The issue of runaway unauthorized expenditure must be addressed as a matter of urgency

Failure to rein in such spending will have severe consequences, not only for government but ultimately the citizens of our province.

The DA remains committed to its role as KZN’s only real opposition and to ensuring that this ANC government delivers on its mandate to the people.

Issued by Francois Rodgers, Leader of the DA in the KZN Legislature/DA KZN Spokesperson on Scopa, 25 October 2022