SPEECH BY MS BARBARA CREECY, GAUTENG MEC FOR FINANCE, ON THE OCCASION OF TABLING THE 2014/15 ANNUAL REPORTS OF THE GAUTENG PROVINCIAL TREASURY AND THE GAUTENG FUNDING AGENCY, GAUTENG PROVINCIAL LEGISLATURE, 04 SEPTEMBER 2015.
Madam Speaker;
Honourable Premier;
Colleagues in the Executive Council;
Honourable Members of this House;
The HOD and Management of Treasury;
Comrades and Friends;
Ladies and Gentlemen.
Introduction
Madam Speaker, the overarching role of Gauteng Provincial Treasury is to ensure that all provincial financial resources are managed effectively, in a manner that promotes the delivery of services to the public.
This mandate means that the department plays a central role in building a developmental state capable of implementing the priorities of government. It does this by providing leadership in the management of finances by provincial departments, public entities as well as local government.
In line with this, the Annual Report that we are tabling today demonstrates that the department is making steady progress in financing the implementation of key priorities of the broad programme of Radical Transformation, Modernisation and Re-industrialisation which are designed to ensure that our province becomes an inclusive city region, underpinned by a smart and green industrial economy.
Taking into consideration the leadership role of Treasury in financial management in the province, it gives me pleasure to congratulatethe management and staff of thedepartment for maintaining a clean audit outcome in 2014/15 financial year.
In order to achieve an excellent financial audit opinion, the department hadto be strict in a manner in which it conducted its financial and non-financial activities, ensuring that there is compliance with rules and regulations across the organisation.
Furthermore, it shows that this department, which is responsible for providing a supervisory and leadership role in managing finances in respect of provincial departments, public entities as well as local government, leads by example in championing transparency, accountability and the effective management of public resources.
Equally important is that Treasury has also been able to provide strong leadership and oversight on financial management matters to provincial departments and our public entities. This view is underscored by the 2014/15 Auditor-General’s financial audit outcomes announced by Premier David Makhura this week which showed that nineteen departments and public entities achieved clean audit status in the year under review. Crucially was the fact that sixteen of these sustained clean audits from the previous year, while three improved from unqualified to clean.
It is also important to note that provincial government did not incur any unauthorised expenditure in the period. This was achieved through a combination of targeted interventions that resulted in a downward trend in unauthorised expenditure from R2.1 billion in 2009, R1.4 billion in 2010, R1 billion in 2011, R393000 in 2012/13, R56,847 in 2013/14 and zero in 2014/15.
These outcomes are very significant for improving public confidence in government because people entrust us with their hard earned money, and they rightfully expect us to use it wisely by investing in job creation programmes and ensure the provision of quality public services including education, healthcare and social security.
We fully understand that there are still challenges identified by the Auditor-General and we are committed to address these so that the entire provincial government could move to the clean zone in terms of financial management and governance.
Madam Speaker; it is because of our drive to address these challenges in supply chain management that we successfully piloted the ground-breaking reforms of the country’s existing procurement framework under the banner of the Open Tender process during the year under review.
This initiative which is championed by Premier Makhura saw for the first time, amongst other things, stakeholders witnessing the tender adjudication process. In addition tender boxes were opened in public during the two pilot projects and Probity Audits conducted to ensure that the procurement process is in line with rules and regulations.
In line with the stated objective to grow the economy, create jobs and fight poverty by supporting township enterprises, we intensified efforts to pay suppliers within 30 days of invoice submission in the provincial government.
Furthermore we introduced an innovative electronic system dubbed “E-Invoicing” which is a new self-service platform that allows service providers to submit invoices online and track them until the payment stage.
Madam Speaker, we continued to work closely with departments in order to drive expenditure on public programmes. I am pleased to report that for the first time in the year under review Gauteng Government spent 99% of the total adjusted infrastructure and conditional grants budget.
This was a significant achievement because infrastructure provides citizens with services and creates jobs. The bulk of our infrastructure spend was on the building and upgrading of schools, roads, clinics, hospitals, libraries, community care facilities and children’s homes. This increasedspending on social infrastructure means that we expanded our services to our citizens. .
Government also managed to increase revenue collected from provincial sources including interest earned from investments, motor vehicle licenses, gambling, gamblingtaxes and hospital patient fees by R700 million to R4.3 billion in the year under review. This was a 16% jump from the previous year. The improvement in the collection rate of departments was due to innovations we continue to make in order to enhance revenue in our province.
During the financial year under review, we intensified our intergovernmental coordination withthe budgeting process in municipalities by providing leadership in annual budget assessments to ensurealignment to Integrated Development Plans and the Gauteng Provincial Plan. Engagements with departments andentities also continued to ensure alignment of budgets to the Gauteng Provincial Plan. These interactions culminated in the development of credible adjustment and main budgets which provided funding to key programmes aligned to the broad vision of Radical Transformation, Modernisation and Re-industrialisation agenda.
Internal operations
Madam Speaker; let me now briefly focus on internal operations. Treasury spent a total of R359 million or 97 percent of its annual budget, and this figure was an increase of 2 percent compared to the previous year. Equally important is that no unauthorised, fruitless and wasteful expenditure was experienced by the department in the year under review.
Another important milestone was recorded in the area of human resource management. In this regard Treasury started the year with a 15 percent vacancy rate, and managed to reduce it to 7 percent by the end of the 12 month period. This is a commendable achievement but much more work still needs to be done in this area going forward.
The department also enhanced efficiencies in core managerial functions. This led to a significant improvement on its Management Performance Assessment Framework and Tool scores, ensuring that it becomes a leading department in the province on MPAT for 2014/15
GAUTENG FUNDING AGENCY
One of the main imperatives of the Gauteng Provincial Government is to transform, modernise and re-industrialise the Gauteng province and build a City Region that is socially cohesive and economically inclusive. Hence together with the municipalities we plan to spend more than R100 billion on roads, housing, water, sanitation, schools, clinics and hospitals in the next three years. We hope that this will enable us to surpass the annual national growth target of 5% set by the National Development plan (NDP).
Significant government and private sector investment in infrastructure will help to address structural constraints to grow our economy as well as create the much needed employment for our people.
. The Gauteng Funding Agency (GFA) has been in the past years seeking mechanisms to fund some of the economic infrastructure through raising capital in the markets and through public-private partnerships and a pipeline of projects has been prepared for release to the market.
On the 16th to 17th July 2015 Gauteng Province hosted the inaugural Gauteng Infrastructure Investment Conference (GIIC). The inaugural GIIC focused on strategic areas of infrastructure in which public and private sector investment is necessary. The strategic areas are; building new mega human settlements, rolling out massive public transport infrastructure, broadening energy mix, investing in ICT infrastructure and broadband connectivity and lastly, aerotropolis (airport city) development.
The legal establishment challenges of the GFA have been addressed following the promulgation of the government component called the Gauteng Infrastructure Financing Agency (GIFA). The GFA was disestablished at the end of June 2015 and its mandate will be carried on by the GIFA. The GIFA will continue with project feasibility studies, sourcing and structuring of alternative financing and forming strategic partnerships with the private sector. Under the GIFA the acceleration of delivery of key infrastructure projects in support of the GPG’s Ten Pillar Programme will gain traction.
In compliance with Section 40 of the Public Finance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999), I hereby table the Annual Reports of Gauteng Provincial Treasury and the Gauteng Funding Agency.
Thank you
1