New Limpopo Premier Stanley Mathabatha says the National Treasury’s intervention team has succeeded in rescuing the five departments that were placed under administration almost two years ago.
Following a meeting with the team of administrators last Wednesday, Mathabatha said today he was sure that the five departments would not regress to where they were when the intervention team was sent to the province.
“On July 31, I had a full meeting with the ministerial task team responsible for the implementation of Section 100 in the province. The briefings I have received assure me that the province will not return to the position it was in December 2011 when the national Cabinet intervened.”
In December 2011, Pretoria placed five departments – treasury, education, public works, transport and health – under administration following revelations of financial mismanagement, maladministration and allegations of corruption.
At the time, National Treasury, which was tasked with managing the administrators, had also revealed that had national government not acted, Limpopo would not be able to pay civil servants in December.
Finance Minister Pravin Gordhan had revealed that:
» Limpopo had a R2 billion shortfall;
» The poor finances were a result of unauthorised expenditure, which grew from R1.5 billion in 2009 to R2.7 billion in 2011;
» Accruals from unpaid service providers had grown to about R500 million
» The province had wiped out its overdraft of R757 million in November 2011 and was asking for it to be increased to R1.77 billion; and
» Some service providers were being paid eight times in one month.
Said Mathabatha: “I am confident now that the Section 100 intervention team has done its work of turning the province around.”
Mathabatha said improvements which can be attributed to the intervention team include:
» Proper cash flow management controls;
» Dealing with unauthorised expenditure and plans to fund the remainder over the medium-term expenditure framework period.
» Having appropriated a surplus budget;
» Processes are in place to turn around provincial treasury and capacitating it to do its oversight work in the province; and
» Processes are in place to strengthen supply chain management controls in the province.
“We commit ourselves to work closely together with the intervention team in taking the province forward. We will do everything in our power to ensure that the province does not return to the situation it was in December 2011,” Mathabatha said.
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