Latest news with #R168.76
The Citizen
12-05-2025
- Business
- The Citizen
Gauteng underspends budget but says R1.8bn not lost
Gauteng underspent R1.8 billion, mostly in health and education, but the province says funds are not lost and may be reallocated. Gauteng Finance and Economic Development MEC Lebogang Maile provided a broad overview of the Gauteng Provincial Government's state of finances and expenditure. Picture: Facebook/Lebogang Maile The Gauteng Provincial Treasury has confirmed that about R1.8 million was returned to the National Treasury due to underspending in its annual budget, mainly from the health and education departments. Gauteng Finance and Economic Development MEC Lebogang Maile confirmed on Monday that the total underspending amounted to R1.799 billion; however, the notion that this money is lost is a 'misunderstanding'. 'The concern that the underspent resources will no longer be available or that they are lost by the Gauteng Provincial Government is a misunderstanding that necessitates clarification,' he said. Gauteng underspent R1.8 billion The Gauteng Provincial Government's final budget for the 2024/2025 financial year was R168.76 billion. By year-end, it had spent R166.97 billion, which is 99% of the budget. The total underspending was R1.799 billion, of which R1.041 billion (58%) came from the Departments of Health and Education. The remaining R769 million (42%) came from all other departments combined. Conditional grants accounted for R381.51 million of the R1.799 billion underspent, while the Provincial Equitable Share (PES) accounted for R1.418 billion. ALSO READ: 'Not clearly defined' — What ANC leaders are saying about Mashatile's 'assassination' attempt Conditional grants are funds given by the National Treasury to provinces or municipalities for specific projects or services. Conditional grants must be used according to detailed conditions outlined in law. Provincial Equitable Share (PES) is a portion of the national revenue shared with all nine provinces based on factors like population and poverty levels. Provinces use it to fund services like health, education, and social development. Unlike conditional grants, this money can be spent more freely within the province's responsibilities. Most departments used 95% or more of their budget Most departments utilised 95% or more of their budget, according to the department's expenditure breakdown. Departments like Infrastructure, Roads and Transport, the Office of the Premier, and Department of Education spent 100% of their budgets. The Gauteng Provincial Legislature had the lowest spend at 93% of its allocated funds. Breakdown of expenditure by departments: Source: Gauteng Provincial Treasury Source: Gauteng Provincial Treasury The Gauteng Provincial Treasury says that once the financial year ends, it reviews all unspent funds to decide what can be kept and used in the next year. ALSO READ: Maile earmarks 60% of Gauteng procurement for local businesses This includes verifying how much has been spent and how much remains as of 31 March 2025; identifying which of the unspent funds are committed to specific projects and which are unallocated; addressing any outstanding payments or invoices with appropriate documentation; and for infrastructure projects, providing clear details regarding tenders, costs, and payments that are still due. If conditional grants are not spent by year-end, they usually return to the National Treasury. However, the province can apply for a rollover (permission to keep the money for the next year) — but only if they provide solid proof that the funds are committed to ongoing projects. R295.67m underspent conditional grants funds applied for rollover Of the R381.51 million underspent in conditional grants, R295.67 million was applied for rollover, and R85.85 million will go back to the National Revenue Fund because the departments couldn't justify keeping it. In terms of PES funds, the R1.418 billion underspent here will undergo a strict internal process in Gauteng to determine whether it should be rolled over. 'Above all else, this process aims to ensure that service delivery imperatives are realised,' the department said. ALSO READ: Nasi iSpani: Teacher assistant programme to be relaunched The Gauteng Provincial Treasury says it must legally pay all service providers within 30 days of getting an invoice, as required by the Public Finance Management Act (PFMA). This rule helps ensure that businesses, especially small and medium enterprises (SMMES), are paid on time and can continue to run smoothly. 9 of 14 departments paid invoices on time At the end of the 2024/2025 financial year, nine out of 14 departments paid 100% of their invoices on time. These include the Office of the Premier, Roads and Transport, Community Safety, Human Settlements, Economic Development, e-Government, Sports and Culture, Cooperative Governance, and the Provincial Treasury. Social Development paid 98% on time, Infrastructure Development paid 88% (excluding client departments), Agriculture and Rural Development paid 71%, Education paid 80%, and Health paid a mere 21% of its invoices within 30 days. The government recognised the issue and committed to improving tools and systems to enhance payment times. It aims to comply with the law, bolster the economy, and support businesses that rely on these payments. ALSO READ: Constitution drafters 'did not foresee' coalition governments, says Maile The Gauteng Provincial Treasury concluded that if a department fails to properly account for its funds, it must return the money to the Provincial Revenue Fund, though this money is not lost. The provincial government keeps all provincial income, such as taxes and national transfers, in the Provincial Revenue Fund (PRF), its main account. Money from this fund can only be used following strict rules and legal procedures. 'Service delivery is a top priority for the Gauteng Provincial Government. For this reason, we remain committed to ensuring that underspent funds are reallocated to crucial programmes and projects in order to ensure that the residents of our province continue to receive the necessary public services needed to alleviate the triple challenges of poverty, unemployment and structural inequalities,' the department said.
IOL News
12-05-2025
- Business
- IOL News
25 budget report reveals R1. 8 billion underspend, but what does this mean?
Understanding Gauteng's financial management: Insights from the 2024/2025 expenditure report Image: Kamogelo Moichela/IOL The Gauteng Provincial Government has released its 2024/2025 expenditure report, revealing that the province spent R166.97 billion of its adjusted budget of R168.76 billion. This results in an underspend of approximately R1.8 billion, or roughly 1% of the total budget. While some media reports suggest these funds will be returned to the National Treasury, MEC for Finance Lebogang Maile clarified on Monday that this interpretation is misleading and overlooks the detailed processes involved in managing unspent funds. Understanding the Financial Landscape Speaking during a media briefing in Johannesburg, Maile emphasised the need for a clear understanding of South Africa's provincial financial framework. 'The Provincial Revenue Fund (PRF) is the backbone of our fiscal management. All revenue collected from taxes, levies, or intergovernmental transfers is deposited here. 'Money can only be spent through approved budgets or as per specific legislative provisions, ensuring transparency and accountability,' he explained. He further highlighted the importance of Conditional Grants, which the National Treasury allocates for targeted projects aligned with national priorities, such as infrastructure and social development. 'These grants are governed by the Division of Revenue Act (DoRA), with strict conditions on their use. Conversely, the Provincial Equitable Share (PES), an unconditional transfer based on a formula considering population and socio-economic factors, provides provinces the flexibility to prioritise within their mandates, mainly health, education, social development, and economic growth.' A Closer Look at Spending and Underspending Initially set at R165.8 billion and adjusted to R168.76 billion, the provincial budget saw departments spending R166.97 billion by year's end, representing 99% of the adjusted budget. Key departments like Health and Education led spending with near or full budget utilisation: Health: R65.29 billion (99%) Education: R65.82 billion (100%) Roads and Transport: R9.77 billion (100%) Social Development: R5.70 billion (98%) Community Safety: R2.48 billion (97%) According to Maile, other departments such as Infrastructure, e-Government, Agriculture, and Human Settlements also spent close to their allocated amounts, with expenditure rates ranging from 93% to 100%. Deciphering the R1.8 Billion Underspend The total underspend of R1.799 billion was primarily driven by the Departments of Health and Education, which accounted for 58%. The remaining 42% was distributed among other sectors. Of this underspend, R381.51 million was from Conditional Grants, while R1.418 billion came from the Provincial Equitable Share. Maile clarified, 'Understanding that these funds are not lost is crucial. They are managed within a rigorous process that allows for the rollover of unspent but committed funds, ensuring they continue to serve service delivery objectives rather than simply reverting to the National Revenue Fund.' The Rollover and Performance Evaluation Process He further explained that the R1.418 billion in provincial equitable share funds will undergo an internal evaluation led by the Gauteng Provincial Treasury. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ 'Every request for rollover is carefully scrutinized, not only on financial grounds but also based on performance and progress in implementing projects,' Maile said. "We aim to ensure these funds are effectively absorbed and contribute to tangible benefits. We want to avoid systemic delays and ensure that service delivery programs are prioritized,' he added. Payment of Service Providers' Invoices Maile also reaffirmed the government's legal obligation to pay its creditors within 30 days, as the Public Finance Management Act (PFMA) stipulated. As of Quarter 4, nine departments had fully complied, paying 100% of invoices within the required timeframe. These include the Office of the Premier, Roads and Transport, and Community Safety. However, Maile said some departments faced challenges—Health paid only 21% of invoices on time, and Education paid 80%. 'Timely payment is not just a legal requirement but a moral obligation. It supports our economy, especially small and medium enterprises that depend on government payments to sustain their businesses. We are committed to improving these figures.' Looking Ahead: Reverting Funds and Ensuring Service Delivery Maile stressed that funds that cannot be justified through proper processes will revert to the Provincial Revenue Fund. 'These funds are not lost; they are available for reallocation to vital programs that directly benefit our communities,' he said. He also highlighted the government's ongoing commitment to transparency. 'Our provincial treasury maintains an open-door policy, providing stakeholders, including the media and residents, with detailed information on how public funds are spent. Accountability is at the core of our governance approach.' Maile reaffirmed the government's unwavering dedication to responsible financial management and service delivery. 'Funds that remain unmotivated or unspent will revert to the Provincial Revenue Fund, but are not lost to us. We will reallocate these resources strategically to ensure continuous progress in addressing poverty, unemployment, and inequalities,' he stated. 'Our promise remains—to be a transparent, accountable, and transformational government that puts the needs of our residents first,' Maile emphasised. As Gauteng moves forward into the next fiscal cycle, the MEC stressed that prudent management, rigorous oversight, and a firm focus on performance will continue to underpin the province's development agenda, ensuring that every rand spent translates into meaningful improvements for its people. IOL Politics
