The South African province of the North West was the worst offender in spending or alternatively keeping track of its capital spending of South Africa’s nine provinces.
In the first nine months of the fiscal year, which ended on December 2003, the North West housing department has reported that it has spent only 2,6% of its capital expenditure allocation of R390-million.
The next worst provincial housing department is the Western Cape, which has spent only 38,3% of its allocation, while the Free State has the best record, having spent 85% of its allocation.
The National Treasury said “the North West department of housing appears not to have not reconciled its suspense accounts, so its reported figure is seriously understated”.
The serious understating of the housing department means that the overall capital expenditure of the North West is only 35,8% compared with an average of 57,1% for all nine provinces with the Eastern Cape the most efficient, having spent 67,8%.
The National Treasury said the Eastern Cape has significantly improved its spending capacity as spending has increased by R930,8-million or 70,6% over the same period during 2002/03.
Typically, most capital spending has a slow uptake in the first part of the year, and tends to be underestimated as some provincial departments do not reconcile their suspense accounts. Reported capital spending therefore rises rapidly in the last quarter of the fiscal year.
Reporting, planning and project management reforms are in the process of being implemented to improve the reporting on capital, to ensure a more even flow of payments between the four quarters.
However, these reforms will take at least three years to implement to all 116 provincial departments, the National Treasury said.
At the national level, total government expenditure rose by 19,4% year-on-year (y/y) to R25,046-billion in December 2003 after surging by 26,5% y/y in September 2003 to R26,895-billion.
The cumulative increase for expenditure for the first nine months is 14% y/y compared with a revised budgeted increase for the full fiscal year of 13,7%. The February Budget had forecast a 14,4% increase.
The 2004/5 Budget will be presented on February 18. — I-Net Bridge