Ricochet News

Gordhan warns of underspending

Gordhan warns of underspending

Co-operative Governance and Traditional Affairs Minister, Pravin Gordhan, has taken a swipe at local municipalities for not spending their annual budget in full, CityPress reports.

Speaking at a media briefing, on the sidelines of a committee meeting held by his Department at the Union Buildings in Pretoria yesterday, Gordhan said that only R47.9 billion of municipal expenditure was spent during the 2013/2014 financial year. This compares to a total operating expenditure amount of R282-billion and total revenue of R292-billion, equating to an expenditure rate of 77.7%, leaving 20% accounted for.

The minister also expressed his concern that some R69-billion had been spent on staff salaries, which, in some cases, equated to 44% of the overall expenditure.

“You’re spending almost 50% to pay for your staff, then what are you using to pay your suppliers and for services? We’ve taken stock of the 278 municipalities and we now have an understanding of what works and what doesn’t,” he said.

It was also revealed that the Eastern Cape, KwaZulu-Natal and Gauteng topped the list of best provincial expenditure areas during this period.

Gordhan also added that he had written to local government MEC’s, expressing his dissatisfaction at the appointment of 170 senior municipal managers and financial officers, some whom were not properly qualified, before stating that they would be removed.

He also added that the Department was in the process of introducing a program that would identify so-called “clean indicators” to help better financial management.

“We want every municipality to ensure they keep proper records,” he said.

“For example, 40 municipalities in the country have received disclaimers every year for the past three years. Most of the reasons are that they can’t produce the documents that the Auditor General wants to see. If record keeping from the start is right, there’s no need for disclaimers, you can have qualified opinions but at least there won’t be any disclaimers.”