KwaZulu-Natal overspent its budget by R2,5-billion in the 2008/09 financial year, audited expenditure results revealed on Thursday.
Provincial finance minister Ina Cronje said several factors explained the over-expenditure, particularly the implementation of the occupation specific dispensation (OSD) in the departments of health and education.
”There have always been budgetary shortfalls associated with OSD — not only in KwaZulu-Natal — but in most provinces,” she said while releasing the expenditure outcome.
”The increases in the number of patients receiving antiretroviral treatment in the department of health as well as the general increases in medical inflation have also put pressure on the health budget.”
Construction and fuel costs had also increased significantly over the year, resulting in infrastructure departments overspending, she said.
The provincial executive planned to finance the over-expenditure over a three year period, starting from the current financial year.
Cronje said the province also over-collected its budgeted own-revenue by R106,6-million.
”This is very positive, as it indicates an improvement in revenue collection measures by provincial departments,” Cronje said in a statement.
”Several departments contributed to this over-collection … the department of transport, education, the premier’s office, health and agriculture.”
The over-collection could be attributed to a number of factors, including the increase in the number of companies paying their outstanding licence fees and a large number of drivers’ licence renewals.
Cronje said the 2008/09 financial year also saw an increase in the gaming and casino industry, which resulted in over-collections on casino taxes.
The rapid processing of medical aid claims led to the health department strengthening its health patient fee collection.
Meanwhile, expenditure on conditional grants — social grants given on the basis of certain conditions — was almost on target at 97,3% compared to 93,8% in the previous financial year.
The provincial executive also planned to finance the over-expenditure through cost-cutting measures outlined by Cronje in her June 2009 budget speech.
She indicated then that goods and services in all provincial budgets would be reduced by 7,5%.
The reduction was expected to save KwaZulu-Natal R876,5-million in 2009/10, R1,02-billion in 2010/11 and R1,1-billion in 2011/12.
Cronje said the reduction of services would not affect core service delivery.
Savings were expected to be made in advertising and communication, travel and subsistence, venue hiring, office furniture, events, the use of consultants, and the reduction of unnecessary overtime payments.
”It is our view that with these cost-cutting measures now in place, the province will realise the necessary savings to finance the over-expenditure,” said Cronje. – Sapa