Finance MEC Ravi Pillay
Finance MEC Ravi Pillay

KZN government commits to tighten screws on Covid-19 funds

By Sihle Mavuso Time of article published Jul 23, 2020

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Durban - KZN Treasury has committed to tighten the screws on how Covid-19 funds are spent after reports of misuse of public funds at two provincial departments this week.

The undertaking was made by the province's MEC for finance, Ravi Pillay, during a virtual presentation of the adjusted 2020-2021 provincial budget - which is meant to accommodate KZN’s fight against Covid-19.

"We have continued with our commitment to monitor Covid-19 expenditure having regard to the risks that we have identified," Pillay said.

The budget had to be adjusted in order to avail R6.2bn for a provincial Covid-19 response and this was done by reprioritising budgets for some departments.

However, the critical departments of health and education were spared from having to reprioritise their budgets.

"As a first instance, all departments’ and public entities’ budgets were assessed line by line to first identify savings that arose as a result of the impact of lockdown. Items such as subsistence and travel were looked at, as there were savings against these for some departments especially during level 4 and 5 of the national lockdown.

“Also impacted were expenditure items related to hosting events and these were identified as savings to be used towards the Covid-19 budget requirements.

“There was also further engagement with each department and entity on areas where further cuts could be effected, for example against the consultants’ budgets, purchases of machinery and equipment and so on,” he said.

Some of the other money came from freezing provincial government posts, reprioritising money for some projects like the construction of a new provincial archive repository. This was while other money came from sources like the provincial contingency reserve where R190m of its R300m was taken away.

“It was also accepted that there would be delays in filling posts this year, and departments and entities were thus required to identify and to retain the budget for critical posts, while any savings from posts that could be delayed to be filled next year were used to source the R6.2bn.

“In aggregate, departments’ equitable share budgets were cut by R3.7bn, with Health and Education exempted from this exercise. The same analysis was done for public entities, and the transfers to public entities were thus cut by R204m," he announced.

Pillay said the province has made available R11.5bn urgently needed for the epic Covid-19 battle in the province.

“The total amount that the province has estimated that is required for the Covid-19 response is around R11.5bn,” he said.

Out of this R11.5bn, the department of health will get R8.2bn, education will get R2.8bn, Social Development will get R300m and department of Transport will get R214m which will mainly go to scholar transport.

According to Pillay, as of July 15, 2020, unaudited figures showed that the 14 provincial governments have so far spent R1.9bn in Covid-19 related procurement.

The biggest spenders were the department of health, education and social development.

As a result of the raging pandemic, the province expects its multi-billion economy to shrink by 8.5% and in the process, it expects about 300 000 working-class people to lose their jobs. However, the provincial government has plans to revive the economy post the Covid-19 period.

“The provincial executive council has had extensive engagements with the private sector and we are currently finalizing the economic recovery plan. In this regard, the provincial executive decided to allocate R300m toward the provincial economic recovery response.”

Political Bureau

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