Spending by South Africa’s provincial governments dramatically improved in the past year as they managed to spend 98,7% of their budgets in the 2006/07 financial year, the National Treasury reported on Thursday.
The fourth-quarter report of provincial budget statements released by the Treasury said the provinces spent R185,6-billion of their combined adjusted budgets of R188-billion.
The report stated that this was an improvement of 15,2% over the previous financial year.
Spending between provinces varied from the lowest at 96,6% in North West and 96,8% in the Western Cape to the highest at 103,6% in the Free State and 101,3% in the Northern Cape.
The figures could be adjusted before national and provincial departments finalise their annual accounts by May 31 when they must be submitted to the Auditor General.
The under-expenditure of R2,4-billion or 1,3% was largely due to under-expenditure in seven provincial education departments. In all, the provincial governments spent R78,8-billion on education, which was 98,3% of the R80,1-billion that had been budgeted. It remains the largest item in provincial budgets.
The provinces exceeded their health budgets by 0,6%, spending a combined total of R53,6-billion, the second-largest item on provincial budgets after education.
For all departments in all provinces, personnel was the single biggest expenditure, with total personnel spending at R104-billion of the R105,5-billion budgeted — more than half the total provincial budgets. Most of this under-expenditure was in education departments, except in the Eastern Cape and North West, which together overspent by R323,5-million on personnel.
Capital spending also improved with R15,6-billion of the almost R16,1-billion spent across departments.
The provinces’ own revenue collection improved, collecting 11,5% more than the previous year.
However, the report said: ”Most provinces exceed their collection of budgeted own revenue, which often reflects understatement of targets rather than improved fiscal effort.”
The national government transferred R150,8-billion in the form of the equitable share and R27,4-billion in conditional grants to provinces for the 2006/07 financial year. — Sapa