Financial problems prompt closer scrutiny of how provinces are run

Finance Minister Pravin Gordhan has called for sweeping changes to be made in the way provinces are run.

Delivering his 2012/13 Budget in the National Assembly on Wednesday, he said several lessons had been learned from the government's recent intervention in three cash-strapped provinces.

"During the past year, it has been necessary to take steps to address financial management weaknesses that have undermined service delivery and put financial sustainability at risk in several provinces," Gordhan said.

"There are several lessons of general application from these interventions."

The lessons included reducing administrative staff in favour of teachers, nurses and service delivery personnel; improving financial management capability across national and provincial departments; and, the need for stricter oversight of supply chain management processes.

Gordhan also called for "better procedures" to be implemented to ensure that provinces did not appoint staff without budget allocations.

"We shall continue to work hard at building institutions and systems where weaknesses have been identified. We must do this in order to restore the trust of our people in our capacity to govern," he said.

Provincial government also needed stronger rules to ensure that legitimate creditors were paid within the legally prescribed 30-day period.

"We need to reduce administrative staff in favour of frontline teaching, nursing and service delivery personnel. We need to improve financial management capability across national and provincial departments. We need stricter oversight of supply chain management processes," Gordhan said.