Gauteng returns unspent R1bn to National Treasury

Gauteng had to return just over R1bn to the National Treasury because the province’s health and education departments had failed to spend the allocated funds in the 2024/25 financial year.

Provincial Treasury department head, Ncumisa Mnyani, revealed this on Monday during a media briefing on the state of Gauteng's finances.

She said the province failed to spend R1.8bn of its allocated funds, with the bulk of that, R1.041bn, coming from the health and education departments. 

The department of health did not spend R724.6m of its R66bn allocated budget, while the department of education also failed to use R317.35m of its R66.1bn budget, Mnyani said.

One of the reasons for the underspent expenditure was due to the compensation of employees.

“During the adjustment budget, about R600m was given to the department of health and R300m was given to the department of education, which was additional to their budgets,” Mnyani said.

“The department of public service & administration issued a circular that included more controls in the process of recruiting, and that has seen a delay in filling positions, which is where some of the expenditure is related to.”

Mnyani said the other the underspending issue was related to infrastructure projects. In some cases, planning was not fast enough, and that contractors would be secured but would be slow in completing projects, which delayed how fast the money could be spent.

“There have also been issues with land invasions,” she said. "Contracts would be awarded but when construction was meant to start you are met with a legal process of trying to evict illegal occupants on those lands."

Gauteng MEC of finance and economic development, Lebogang Maile, said it was not possible to plan around illegal invasions.

“If the department has planned to build something on the land, it can take 18 months [to do the necessary planning]. While one is busy with the process, some people are invading and it’s an illegal activity that one doesn’t anticipate.”

Maile said of the funds being returned to the National Treasury, R1.4bn was from the provincial equitable share (PES) and R381.5m was from conditional grants.

“Of the R381m in conditional grant underspending, a total of R295m was subject to an application for the National Treasury, while the relevant departments could not motivate and provide evidence for the balance of R85m, which will revert to the National Revenue Fund,” he said.

“The R1.4bn in PES funding will also be subject to internal Gauteng government process led by provincial Treasury and subject to intense scrutiny with all requests evaluated not just on financial aspects only, but also performance, to provide comfort that there are no underlying impediments to the absorption of funds rolled over,” he said.

Maile said he is confident that once rollouts are approved, the province will only really lose R85m to the National Treasury instead of R1.8bn.

“The departments will apply for a rollover in certain instances ... and we will then look at whether we give them the money or not. [Any] remaining money goes back to the revenue fund.”

SowetanLIVE