Limpopo finance chaos

The economic embarrassment besieging Limpopo might be more than the estimated R2-billion fiscal shortfall and may have had far-reaching consequences on service delivery to people in the province.

Yesterday a joint ministerial team, led by Finance Minister Pravin Gordhan, revealed shocking instances of maladministration – and possibly criminal intent – that have left Limpopo cash-strapped and the province’s administrators with egg on their faces.

The province has spent "beyond its means", with the ministerial team declaring: "This has got to stop".

Though the entire province’s finances will be restructured and overhauled, four departments have emerged as being in a complete shambles.

Health, education, public works, and roads and transport will be subjected to Big Brother control because, according to the ministerial team, they were in disarray and needed national intervention.

The intervention follows a bold announcement by President Jacob Zuma’s cabinet in December that Limpopo was on the brink of economic collapse and in dire need of a financial bail-out.

Zuma was, however, accused of using state machinery to fight political battles after placing almost the entire Limpopo government under administration.

The announcement on December 5 was in some quarters viewed as a power play by the Zuma faction of the ANC.

The ANC Youth League spokesman in Limpopo, Che Selane, hit back by saying it was "politically motivated" and a "knee-jerk reaction of those who fear that a change of ANC leadership in Mangaung in December this year may mean the end of their political lives."

Limpopo is the stronghold of embattled ANCYL president Julius Malema, Zuma’s one-time friend turned nemesis.

At the time of the announcement, the cabinet said heads would roll if forensic investigations uncovered illegal conduct.

DA MP James Lorimer yesterday questioned Gordhan’s delayed intervention, saying he should enforce the regulations of the Public Finance Management Act consistently, and should have done so far earlier in Limpopo.

"Questions can legitimately be asked about why the [act] only started being enforced in Limpopo when Premier Cassel Mathale decided to take on President Zuma.

"It is clear from this morning’s briefing that officials in Limpopo have for years been allowed to circumvent the [act] without action being taken by the Treasury or the provincial government," Lorimer said.


WITH projected budget overspending of R461-million, the Health Department was found to have had poor asset management; to have spent R400-million on irregular expenditure for goods and services; to have claimed R427-million in assets with no supporting documents, and only R67-million of R138-million said to have been owed to suppliers could be verified.

Since taking control of the province on December 8, the national department has assisted with verifying payments and settling accounts.

Minister of Health Aaron Motsoaledi said his department would investigate further and act against criminal activity.


VARIOUS "extremely weak" controls, including lack of proper supply-chain management, led to unauthorised expenditure of R2.2-billion, overspending of R293-million and the racking up of R190-million in unpaid bills.

Basic Education Minister Angie Motshekga said the province had 2400 excess teachers and 200 "ghost teachers".

She said that some schools did not receive any funds last year, making difficult the day-to-day running of schools.

"As a result, the National Department of Basic Education has set up a team to ensure that pupils and interests in the education sector in Limpopo are not compromised."


MINISTER Thulas Nxesi identified a number of risks relating to lease and asset management that he regarded as "critical to the province’s cash crisis".

One of the risks was government departments’ acquisition and registration of immovable assets without Public Works being involved.

Consultancy fees – at 25% of infrastructure costs – were found to have been "unusually high", about 7% higher than the national average.

Nxesi said tenders were being awarded without proper bidding processes and tender values were increased. One example was security contracts of R1.8-million a month extended since 2010 without proper procedures being followed.


MINISTER S’bu Ndebele, too, revealed that there were no contract management systems in place; with weak internal controls being a huge challenge.

"It should be clear to all South Africans, and especially the people of Limpopo, that these shortcomings could not be left unattended by a government that is responsible, accountable and committed to improving the conditions in which people live," the ministers said in their statement.

(date:) 2012-01-20

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