Limpopo service sabotage – Pravin

January 20 2012 at 07:44am
By GAYE DAVIS

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Finance Minister Pravin Gordhan. Photo: GCIS

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The government says it has evidence of attempts to “sabotage” service delivery in Limpopo to blame non-delivery on the national government’s decision to take over five departments in the bankrupt province.

Finance Minister Pravin Gordhan made the startling claim on Thursday when he said a forensic investigation would start this week into Limpopo’s financial shambles.

“I can also say, frankly, that there is sufficient evidence that there have been attempts at sabotaging service delivery in order to blame non-delivery on the national intervention,” he said, without identifying the suspected saboteurs.

“We are aware of this and the law enforcement authorities will start acting on this particular question fairly shortly,” he said in Polokwane.

The National Treasury would have to restructure the province’s finances to find savings to cover a looming R2 billion shortfall. And those implicated in wrongdoing would be tried in special, World Cup-style courts.

The government’s decision to step in led to Limpopo’s finance, health, education, social development, public works and roads and transport departments being put under administration last month.

Coming on the eve of Limpopo Premier Cassel Mathale’s re-election bid at the ANC’s provincial conference, the move was interpreted in some quarters as a bid to politically neuter him as a prominent ally of President Jacob Zuma’s nemesis, ANC Youth League leader Julius Malema.

The political ante was upped further at the weekend when ANC treasurer-general Mathews Phosa, speaking in Sekhukhuneland, suggested Mathale take up the matter of the intervention with Luthuli House.

Flanked by members of the joint ministerial task team, Gordhan said on Thursday it had become clear to the National Treasury on November 22 that Limpopo was bankrupt, without the cash to pay teachers, doctors, nurses, social workers, service providers and other public sector workers.

The Treasury had warned the Limpopo treasury throughout last year that at the rate it was spending, it would run out of funds. “To put it simply, the province was spending beyond its means and this had to be stopped,” said Gordhan.

“The province faces, as it stands today, a potential shortfall of R2bn at the end of this financial year (in March).”

By December, it had become apparent that provincial treasury management “had collapsed – there was no proper cash management system in place and the budget section… appeared to have been dysfunctional”.

This was after the Limpopo Treasury tried in November to boost its R757 million overdraft with the SA Reserve Bank by R1bn, prompting a due diligence probe by National Treasury officials. A request by the province for an extra R500m on its overdraft with a commercial bank was denied and the facility was withdrawn.

The reason for Limpopo’s parlous financial state was unauthorised expenditure that swelled from R1.5bn in 2009 to R2.7bn in 2011, Gordhan said.

Accruals – invoices left unpaid in order to be funded by cash from the next year’s budget allocation, and a way of covering up over-spending – stood at R500m by the end of March, Gordhan said.

Among a catalogue of financial laxity and mismanagement, Gordhan cited the province paying certain service providers up to eight times a month – every two-and-a-half working days.

“Expenditure reporting was shown not to be credible. Supply chain management processes were generally not in line with legal requirements,” he said.

Possible illegal payments to service providers by certain departments had been uncovered, while further investigation would “determine how the province and its executive made these decisions”.

Gordhan said the government had a duty to ensure all citizens received cost-effective services.

“And if there is anything that is endangering these services… we are required (by law) to intervene.”

Every effort would be made to pay service providers within 30 days, providing there was proper documentation.

Basic Education Minister Angie Motshekga said steps were being taken to provide pupils in Limpopo schools with textbooks and materials after provincial department officials failed to order them on time.

The ANCYL in Limpopo denied any sabotage.

It agreed service delivery in the province was paralysed and put the blame on the “interference by national cabinet”.

There were problems of non-payment for school feeding schemes and transport, stocks of medicine in hospitals – including a lack of ARVs – were low and education bursaries had not been paid, it said.

“All allegations of sabotage are unfounded.

“The only sabotage experienced in Limpopo started after the so-called national intervention. The welfare of our people is the one that is being sabotaged,” the league said on Thursday. - Political Bureau