Swift action will be taken against officials involved in financial mismanagement in the three provinces (Free State, Gauteng and Limpopo) placed under national government’s control, Finance Minister Pravin Gordhan said on Tuesday.
“[We] will then put in a team of officials who will ensure … we find out what’s actually going on and where there has been maladministration, that the appropriate action is taken and taken quickly,” he told SABC radio news.
“Our main concern is that, firstly, we want public finances managed properly.
“Secondly, there must be proper governance processes and the law must be followed. People can’t do what they feel like.
“And thirdly, service delivery to our ordinary citizens must not be affected as a result of financial mismanagement or other things that are happening,” Gordhan said.
Intervention
On Monday, Cabinet announced that national government would intervene in the Free State, Gauteng and Limpopo under the Constitution.
“The trigger was the fact that there was a request for an additional R1-billion in October in overdraft by the Limpopo province,” Gordhan said.
Cabinet had been monitoring the finances of these provinces for some time.
“There’s been a … trend of under spending, overspending, violating supply chain provisions and this is what we want to thoroughly investigate now.”
He said it was important that a team of officials were put in place immediately to ensure proper systems and controls were implemented while a forensic investigation took place.
Taking over
When asked how the provinces had managed to get themselves into a financial mess, Gordhan said they had a fair amount of autonomy and received just over 40% of total revenue distributed within government this year and next year.
Intervention in the Limpopo provincial government would take place according to section 100(1)(b) of the Constitution.
“What this actually means … is that a national minister actually takes over the function, for example, of health or education … or treasury,” Gordhan said.
In the Free State this would happen according to section 100(1)(a) of the Constitution.
The Gauteng premier would sign an agreement with the ministers of health and finance to address financial management problems in the provincial health department and other matters.
Monitoring committee
Cabinet said a monitoring committee would be formed under the leadership of national treasury and consist of various ministries. These included higher education and training, basic education, transport, health, public works, justice, public service and administration.
The committee would be empowered to co-opt any other ministry as it deemed appropriate.
In Gauteng, the health department has been facing chronic problems with large accruals and other financial issues. The ministers of health and finance would assist the premier and MEC with financial management and supply chain management issues.
In addition, urgent action would be taken at the Gauteng Shared Services Centre. — Sapa