Cabinet cracks whip on non-compliance

(Image: GCIS)

"The minister of finance was asked by Cabinet to urgently review the situation in Limpopo and other provinces and report back to Cabinet on proposed actions to be taken to improve the financial situation and its impact on service delivery and provincial functions," Cabinet said in a statement.

While National Treasury and other relevant national departments have been engaging with various provincial departments over time to try to improve financial management and service delivery, Cabinet said the situation remained unsatisfactory.

Gauteng had requested National Treasury to help address their supply chain management and financial controls in the Department of Health and Social Development, which has been in the spotlight for not paying service providers on time.

Cabinet said Gauteng premier Nomvula Mokonyane has been made to sign an agreement with the Ministers of Health and of Finance to solve the province's financial mismanagement.

In addition, urgent action will be taken in respect of the Gauteng Shared Services Centre (GSSC), which provides administrative services for all the province's departments.

Monitoring Committee established

The Free State will be assisted with the Police and Roads and Transport Departments after poor financial management and non-compliance to supply chain management processes were identified.

The biggest rescue is in Limpopo, where five departments - Treasury, Education, Transport and Roads, Health and Public Works - will be taken over by the national departments.

Cabinet said the province had dried up its R757 million overdraft facility. The province had requested that its facility be increased by R1 billion to R1.7 billion in order to pay salaries.

This was declined and instead they were given an advance from their equitable share.

Cabinet said forensic investigations will be carried out in these provinces, with strict timelines, and there will be consequences for any illegal conduct uncovered.

A Monitoring Committee of seven ministers, led by finance minister Pravin Gordhan, has been established to help monitor these three provinces.

"This committee will be empowered to co-opt any other ministry as it deems appropriate," reads the statement.

Cabinet is also involved in the administration of the Eastern Cape Education Department, which is facing financial management problems that have crippled the schooling system.