At least six government departments were red-flagged for underspending or slow spending of money allocated for key programmes like substance abuse and policing by December, a Treasury official said at Parliament on Tuesday.
“This is an indictment on us,” said Deputy Director General of the Public Finance Committee in the Treasury, Donda Mogajane.
“You have got money lying idle,” he told Parliament’s Standing Committee on Appropriations, in a briefing on government spending up to the third quarter of the 2015/16 financial period – the end of December.
If the money is underspent, or spent at too slow a pace, the Treasury reclaims the money. But to avoid losing the money, some departments shift it to other programmes to keep it inhouse – and thus keep it from going back to the Treasury.
The practice of virements – or more crudely “fiscal dumping” – meant the money was not being used for the programmes they were intended for by the end of December – the third quarter of the 2015/16 financial year.
For example, according to the National Treasury’s third quarter expenditure report, the Department of Health spent only R2.8m (5.8%) of the R47.5m allocated for the substance abuse treatment grant.
‘Vacancies are costing us’
This was partly caused by provinces being late with submissions of progress reports and financial statements needed for compliance. The health department has asked Treasury for a new payment schedule for this.
The Department of Communications spent only 5.5% of the R352.6m allocated for the move to broadband by the end of December, due to delays in a decision over service providers, Mogajane said.
The hold-up was because of a flurry of legal opinions flying between the lawyers of interested parties over who should get contracts to roll out out fast internet connections between 5 000 government offices in eight district municipalities.
“Broadband roll-out is very slow and the department is not coming to the party as we expected them to,” he said.
At the same time, the Treasury still wanted procurement processes to be done properly.
Another example was the vacancy rate of 9 413 posts in the SA Police Service at the end of December, caused by a combination of vacancies not being filled and a need to make up the money for the 2015 salary increase.
In the police, there were 3 634 vacancies in visible policing, and 2 514 in detective services – core programmes within the department.
“Vacancies are costing us because you have locked in money there that you cannot spend in other programmes.”
Mogajane said Treasury could understand certain circumstances where spending was not in line with planning – the extra money spent to quell the xenophobic attacks last year, for example.
But when people resigned, he said, the replacement process was supposed to start as soon as a resignation letter was accepted.
‘Come to the party’
He said officials found that department employees were sometimes afraid to start the process in case they were accused of irregular expenditure on job advertisements for example, so money lay idle.
The Independent Police Investigative Authority had 51 vacant posts – mostly due to delays in vetting by the State Security Agency.
Ipid hoped that doing this function in-house would alleviate the problem. Concerned MPs on the Standing Committee on Appropriations wanted representatives from these and other departments to come to Parliament to tell them why they were slow to spend the money.
The Treasury also wanted the Department of Co-operative Governance and Traditional Affairs (Cogta) to “come to the party” and hurry up with verifying the costs of drought relief because farmers needed it desperately.
Eskom was also fingered for not spending the money set aside for the delivery of solar geysers. It was asked to give the money back, but decided to have a fresh look at the programme.
Not all departments were slow to part with their money.
The Department of Defence had already gone over budget by the end of December – spending R31.9bn of their scheduled drawings of R31.4bn. This was mainly because of salary increases.