Cape Town - The Provincial Treasury has has been thrust into the spotlight for underspending by R17.6 million in the 2021/22 financial year.
Provincial Treasury accounting officer Dave Savage appeared before the Public Accounts Committee in the legislature to account for underspending and the impact on its mandate and predetermined objectives for the 2021/22 financial year; the process on how National Treasury deals with irregular expenditure; and the condonation process and requirements for irregular expenditure when such is requested by provincial departments.
Savage’s appearance comes exactly a year after the EFF in the legislature criticised the provincial departments for “deliberately” underspending so that funds could be re-allocated to the Provincial Revenue Fund, which falls under the provincial Treasury.
It was provincial Treasury’s turn in the hot seat to explain its under-expenditure yesterday.
Savage said about half of the department’s underspending of R17.6m for 2021/22 was due to “exogenous” factors – global supply chain bottlenecks; difficulties in getting hold of laptops in the Covid-19 period; bursaries being declined by prospective students; late claims being submitted by suppliers; the department’s failure to transfer the financial recovery services grant to vulnerable municipalities; and training sessions not taking place due to Covid.
“But there were still procurement delays that were endogenous - an area that we have struggled with,” Savage said.
“The underspending didn’t have a significant effect on the achievement of our predetermined objectives because the department is predominantly compensation spending-heavy.”
He described the delays as “undesirable” and said management had taken steps to address it.
Provincial Treasury chief executive officer Annamarie Smit said the department had a “history” of underspending, but in the current financial year they emphasised spending performance.
Touching on the provincial Treasury’s administration programme, Smit said the external bursary programme had R1.697m set aside for it, while the procurement of laptops had a budget of R2m.
She said a R1.9m underspending arose due to the financial management recovery grant – in relation to “vulnerable” municipalities – not being allocated and transferred timeously because the recovery plan was only instituted on March 7, 2021.
MPLs sought explanations as to why there was underspending on bursaries. Savage said: “When people are awarded the bursaries, they may then subsequently – as young people often do at the start of their careers – find more compelling bursaries offers or take a different course in the careers outside the scope of the bursary we offer.”
He said the department also faced “disruptions” due to changes in the National Student Financial Aid Scheme funding model.