Treasury clarifies expenditure related to the official residence of the Premier
The Gauteng Provincial Treasury has noted with concern media reports on maintenance expenditure for the official residence of the Premier.
It is incorrect that the province will spend the reported amount on the official residence because what the Gauteng Legislature will appropriate for 2013/14 financial year is R120 000 based on the Medium Term Expenditure Framework (MTEF) that is used in this country.
The MTEF is a spending plan that covers a longer period than the immediate financial year for which it is presented, typically 3 years (2013/14, 2014/15 and 2015/16). It is designed to focus on a longer horizon as opposed to piece-meal and short-term budgeting decisions that would otherwise characterise the budget process.
MTEF is a rolling process repeated every year and aims at reducing the imbalance between what is affordable and what is demanded. It does this by bringing together policy-making, planning, and budgeting early in the budgeting cycle, with adjustments taking place through policy changes.
The Estimates of Capital Expenditure (ECE) presents the province's infrastructure project list and estimates over a three year period but approval is only for one year. The outer two financial years are estimates and they are not ‘casting stone'. Budgets figures in these financial years are continuously subjected to rigorous Treasury processes to determine credibility and accuracy.
During the 2012 MTEF, it was estimated that R400 000 was going to be spent in the official residence but in the 2013 MTEF only R120 000 has been allocated. The last two years of the MTEF are estimates and are subject to change based on condition of assessments that must be conducted to determine whether or not it would be feasible to maintain them or they must be disposed-off.
Having said the above it should be noted that the estimate of the R7 million in the outer year of the MTEF was erroneously captured in the Estimates of Capital Expenditure book. The correct figure for 2015/16 is R500 000 which is an ESTIMATE that will still be subjected to the rigorous processes of Treasury before it is appropriated. Corrective measures are currently been implemented in the department to ensure that this does not happen in future.
One of the advantages of the MTEF is that it introduces a sense of transparency by making public the government's longer term policy goals and budget figures. The MTEF also allows for programme evaluation, that is, assessing what has worked and what has not worked from what has been implemented previously before finally appropriating any budget for a particular financial year.
ABOUT THE GAUTENG PROVINCIAL TREASURY
The Gauteng Provincial Treasury was re-established in April 2012. The Department has set for itself a vision to be an activist, developmental and interventionist Treasury that is a pioneer in efficient resources management and fiscal discipline in South Africa.
Statement issued by Mr Mandla Nkomfe, MEC: Finance, Gauteng Provincial Treasury, March 8 2013
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