Underspending by state departments raises MPs’ hackles
Departments with the largest unspent funds are higher education and training, police, health, co-operative governance, small business development and energy
Unspent funds by government departments in the first six months of the financial year total R3.9bn, Treasury deputy director-general for public finance Mampho Modise told parliament's two appropriations committees on Thursday.
This means that billions of rand meant for critical programmes to address poverty and unemployment and deliver services are not being spent
The unspent amounts are surrendered to the national revenue fund unless finance minister Tito Mboweni approves their use elsewhere in the same department.
The departments with the largest unspent funds were higher education and training (R897m), police (R703m), health (R346m), co-operative governance and traditional affairs (R310m), small business development (R300m) and energy (R256m).
MPs expressed concern Thursday over the underspending on key government programmes.
Among the unspent funds highlighted by DA MP Dennis Ryder and ANC MP Dipuo Peters — because they directly affected much-needed service delivery — were the R300m unspent on the community works programme, which is meant to alleviate poverty; the R157m unspent by the Jobs Fund at a time of critically high unemployment; the R250m unspent on Eskom's integrated national electrification programme, while many homes are not connected to the grid; and R300m unspent by the Small Enterprise Finance Agency's small business and innovation fund, at a time when many small businesses are struggling to survive.
“The departments are not fulfilling their mandates and doing what they set out to do at the beginning of the year,” Ryder said. “These are not the places where departments should be underspending. There must be consequences for departments underspending, especially in areas that are nationally urgent places to spend money,” said Modise.
Modise said the main reasons for undeclared unspent funds were, among others, the change in the scope of projects; savings from the compensation of employees; lower or delayed claims; phasing out of projects; and slower-than-projected draw-downs.
Unspent funds from the previous fiscal year, which have been contracted for but not yet spent, may — with the approval of the Treasury — be rolled over. The amount rolled over so far in 2019 is R345m.
The information was provided during Modise's briefing on the 2019 Adjustments Appropriation Bill. That amends the Appropriation Act, which is based on the budget tabled in parliament by Mboweni in February and is adjusted by the medium-term budget policy statement, which was tabled at the end of October. The bill increases or decreases amounts allocated by the act and includes details of the transfers made between departments and between programmes within the same department.
It also includes allocations for state-owned enterprises.