KwaZulu-Natal's Education Department grapples with R250 million debt crisis
Sadtu provincial secretary Nomarashiya Caluza has raised the union's concern about the financial state of the KZN Department of Education.
Image: Indepenent Newspapers Archives
A financial report has laid bare the deepening financial crises faced by the KwaZulu-Natal Department of Education, painting a picture of an entity drowning in debt.
The department owes close to R250 million to the eThekwini Municipality for water delivered by water tankers, as detailed in the financial report released by the municipality last week.
This comes as the department is already battling to service a debt owed by Section 21 schools to the municipality for services. It was not immediately clear over what period the debt has been accumulated, but the report covers the latest period from January to March and details all debts owed to the municipality, including by consumers, business, and government.
The financial state of the department is a concern to political parties and the South African Democratic Teachers Union (Sadtu), which claims that the department has collapsed financially.
KZN Education faced serious budget cuts over the past few years and has revealed that it is struggling to meet its obligations. It has emerged that it has not paid all the suppliers of the school nutrition programme and missed salary payments to Grade R teachers, who were expected to be paid late last week.
The financial report stated, 'An amount of R250 million is owed by the Department of Education for the supply of water tankers.'
The City's eThekwini Water Services and the Department of Education have established that the water was supplied without a valid Service Level Agreement (SLA) in place; but the issue of the accumulated debt has not been resolved.
Discussions are ongoing between the water service and the department on how to resolve the debt issue. The report also indicated that the department's Section 21 schools are struggling to keep up with their accounts, which have fallen into arrears despite a payment arrangement being in place.
'After engagements with the Department of Education, in May 2024, a payment arrangement was concluded for an amount of R169.1m, which was the debt owed by 521 schools at the time. The arrangement was that the department would pay this amount in equal instalments of R11m over 13 months after the initial down payment of R17m was made. The Department of Education has paid as per the agreement, with the last instalment for March still to be received.
'It should be noted that although an arrangement was reached with the Department of Education in May last year, the debt for 521 schools has continued to escalate due to schools not paying their current charges, which have now escalated into arrears,' said the report.
The DA spokesperson on Education, Sakhile Mngadi, expressed alarm at the deepening financial implosion within the province's department. He said a crisis is now threatening the well-being of millions of pupils and the constitutional viability of KZN's education system.
'This is no longer just a financial issue. It is a humanitarian and constitutional crisis, born out of poor leadership and a toxic culture of evasion and spin. Every day that passes without urgent intervention places more children at risk, undermines their right to education, and erodes the public's faith in government,' he said.
Sadtu provincial secretary Nomarashiya Caluza said the department has collapsed.
'As we speak, some Grade R practitioners have not been paid. The department is struggling to pay service providers for school nutrition programmes, acting personnel have not received acting allowances, and some officials cannot attend important workshops. Some service providers that assisted with stationery at the beginning of the year have not been paid.
"Schools have not received their full basic allocation for 2024. What else do we need to see to say that the department has collapsed?' she asked.
Addressing the issue of unpaid school nutrition service providers, the department said it is addressing this and blamed a system glitch for the delay in payment.
'We acknowledge the concerns raised by our valued service providers and wish to assure them that the department is doing everything possible to resolve the technical glitches affecting payment processes. The problem has nothing to do with the financial difficulties of the department, as the NSNP is paid from the grant allocation. We remain committed to transparency, timely communication, and the uninterrupted provision of meals to our pupils across the province,' it said.
Speaking on the issue of the debt, Education Department spokesperson Muzi Mahlambi said: 'We are in agreement with them (municipality) as to how this is being addressed. We hold meetings with them and discuss these issues.'
THE MERCURY
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
6 hours ago
- The Citizen
Welcome to adulting: what to do with your first pay check
With the right habits, a first pay check is not just income but a launchpad to financial freedom for young people. When you get your first pay check it could feel like you are an adult now. That also means that you must treat your money like an adult, but not all young people know how to manage their money wisely. Debra Slabber, director and portfolio specialist at Morningstar Investment Management South Africa, shares her own early financial experiences and four practical lessons she wishes she knew when starting out: #1: Understand the basics of money Financial literacy is often overlooked in our school system and rarely discussed openly at home. Learn to budget, spend wisely and grow your wealth. Just a little effort up front can make a big difference later. The goal is financial confidence, not perfection. ALSO READ: How to use your pay cheque to get financial freedom #2: Spend less than you earn This is the golden rule of personal finance, although it is often ignored in the early years. 'There is no shame in living frugally while you build a foundation. Avoid using debt to fund your lifestyle. Loans should support long-term goals such as buying a house, not short-term gratification.' #3: Start investing no matter how small Investing even R250 a month can make a meaningful difference when invested consistently over time. 'Time is your biggest financial advantage. Harness the power of compounding now, and your future self will thank you.' ALSO READ: How to make the most of your first salary #4: Enjoy the process of building wealth Building wealth is not about depriving yourself but about empowerment. 'There is joy in taking control of your finances and seeing your progress over time. Learn about the different tools available, track your growth and celebrate the small wins with your first paycheck.' Slabber's advice is clear: the earlier young South Africans start making smart money choices, the better positioned they will be for long-term success.
IOL News
2 days ago
- IOL News
South African REIT sector posts 4. 1% gain in May, outpacing equity and bond markets
The shares of South Africa's listed commercial property sector continues to rise steadily in May from a slow start at the beginning of the year as interest rates continue to decline, there was a small reprieve in global tariff regimes and local property fundamentals improved. Image: AI Lab The South African REIT sector continued its upward trajectory in May, posting a 4.1% gain, once again outperforming the equity market returns of 3.1% and the 2.7% rise in bonds, said Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments. Anderson, compiler of the SA REIT Association's monthly Chart Book, attributed the sector's improving sentiment to expectations of lower interest rates in South Africa, a small reprieve in global tariff tensions, and growing evidence that property fundamentals are strengthening. 'These trends set the stage for higher distributable earnings growth across the sector in 2025 and 2026,' said Anderson. The REIT sector gain in May builds on April's 6.9% surge, bringing the sector's year-to-date return to 6.7% - a recovery from a slow start in January. While the sector's performance still trailed the broader equity market's gain of 14%, SA REITs had now outpaced the bond market in 2025, signaling renewed investor confidence, he said. This comes as South Africa's 10-year government bond yield recently dropped to below 10% for the first time in more than three years. May saw several REITs reporting their financial results, reinforcing the sector's ongoing recovery: Redefine Properties results for the six months to end-February 2025 saw revenue up 3.5% and distributable income per share rising 0.7%, leading to an interim dividend increase. Full-year guidance was maintained, with expectations that distributable income per share will range between 50c and 53c - representing growth of between 0% and 6%. Equites Property Fund delivered full-year results in line with market expectations, increasing distributions by 2.1% to 133.92 cents per share. More notably, guidance for 2026 far exceeded consensus forecasts, with anticipated distribution growth between 5% and 7%, driven by strong rental growth and a high-quality logistics portfolio following two years of asset recycling. Equites was the top-performing REIT in May, with its share price rallying 10%. Western Cape focused Spear REIT also benefited from robust results, reporting a 9% share price increase following its full-year results to end-February 2025. The company also announced the acquisition of Berg River Business Park in Paarl for R182.15 million in an all-shares transaction. Management is exploring further acquisitions and developments. Other REITs reporting results in May included Burstone, Delta, Dipula, Emira, and Octodec, with a common theme emerging - property fundamentals in South Africa are improving across all sub-sectors, reinforcing investor confidence. The market capitalisation of the SA REIT sector now surpasses R250 billion - marking the first time since January 2020 that it has reached this level. 'With further interest cuts a possibility, stabilising macroeconomic conditions, and improving company guidance, investor confidence remains strong, and the momentum is likely to carry through the remainder of 2025,' said Anderson.
IOL News
2 days ago
- IOL News
DA pressure reignites SANDF COVID drug investigation
Both the Hawks and the SIU are proceeding with the investigation into SANDF Cuban Covid looting spree, says the writer. The criminal investigation into how over R250 million was misspent by the SA National Defence Force in 2020 on an unapproved anti-COVID vaccine from Cuba is advancing again after significant DA pressure. Both the Hawks and the SIU are proceeding with this investigation, and complainant statements were taken in person this week to support the charges the DA laid with the SAPS in 2022. Because the criminal investigation had gone cold, the DA used Parliamentary Questions to the Minister of Police to prompt him on the delay in the investigation, and wrote letters to the Minister too, and following this DA intervention, the criminal investigation has been revived. The DA will now push for concrete timelines for the full investigation of this case, and we expect that it will be handed over for prosecution. Those responsible for the SANDF Cuban Covid looting spree, under the guise of a public health emergency, must be held to account — regardless of their rank or political connections. During the most recent sitting of the Joint Standing Committee on Defence (JSCD), the DA successfully proposed that all Hawks and SIU investigations into corruption and maladministration in the SANDF - including this scandal - be reported on quarterly. The committee supported this proposal, marking a critical step in restoring transparency and oversight in historical defence misspending. 'Whilst always abroad', Minister Motshekga may be comfortable with impunity in uniform. The DA is not. We will continue to demand answers and ensure that the Minister of Defence focuses her attention on Defence priorities inland. Nicholas Gotsell (MP) DA NCOP Member on Security & Justice
