Western Cape Adjustments Appropriation Bill: Provincial Treasury

Finance, Economic Opportunities and Tourism (WCPP)

27 November 2019
Chairperson: Ms D Baartman (DA)
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Meeting Summary

The Committee deliberated on Vote 3 in the Schedule of the Western Cape Adjustments Appropriation Bill 2019. The Minister said that the Department had a main budget of R357 million that was revised down to R330 million and that he was ready to answer the questions from the Committee.

Members asked what it meant when money was transferred to “Households”; how the percentage adjustments this year compared to previous years and whether it represented a bigger percentage of the global budget; whether the provision for leave gratuity paid to a former employees in sub-programme 1.3: Financial Management, was for a public servants that went on early retirement; how many Provincial Treasury staff members took up the early retirement offer; why the bursary applications were declining  and how long the finalisation of the framework for the Financial Good Governance Grant in Programme 4 was anticipated for. Members raised concerns about vacancies that were put on hold due to the revision of the strategy as per the earlier discussion with the Minister.

Members heard that that the three vacancies on hold related to the Department of Economic Opportunities and Tourism and not to the Provincial Treasury and that bursaries would fall in the category of “Households”, when a benefit was accrued to an individual. The Committee expressed concern about the refund of R571 000 for overpaid taxes that was due to the Province; and the R760.4 million adjustment which appeared as a miscalculation of R55 million as the figures did not add up. Members heard that the listed adjustments did not add up because only big ticket items were listed.

The Western Cape Adjustment Appropriation Bill: [B6 – 2019] was unanimously adopted by the Committee without amendments.

The following Minutes were adopted without amendments: 12 November 2019 at 9h00; 12 November 2019 at 12h00; 20 November 2019 and 22 November 2019.

The annexures were adopted by the Committee.

Meeting report

The Chairperson invited Mr David Maynier, the Minister of Finance and Economic Opportunities: Western Cape Government, to make a few introductory remarks.

Introductory remarks by the Minister

The Minister said that the Department had a main budget of R357 million that was revised down to R330 million and that he was ready to answer the questions from the Committee.

The Chairperson tabled Vote 3 as documented on pages 35 –51 of the Adjusted Estimates of the Provincial Revenue and Expenditure 2019 report. She granted Committee Members the opportunity to engage the officials of the Department on the content of the report.

Briefing on the Adjusted Estimates of the Provincial Revenue and Expenditure 2019 Report

Discussion

Mr A van der Westhuizen (DA) referred to the item classified as “Households” in the report and asked what it meant when money was transferred to “Households”. He queried how the percentage adjustments this year compared to previous years and whether it represented a bigger percentage of the global budget.

Ms N Nkondlo (ANC) asked whether the provision for leave gratuity paid to a former employee in sub-programme 1.3: Financial Management was for a public servant that went on early retirement. She asked how many Provincial Treasury staff members took up the early retirement offer. She raised a concern about vacancies that were put on hold due to the revision of the strategy as per the earlier discussion with the Minister. She asked why the bursary applications were declining. She queried how long the finalisation of the framework for the Financial Good Governance Grant in Programme 4 was anticipated for.

Ms Makamba-Botya (EFF) asked how it happened that a refund of R571 000 for overpaid taxes was due to the Province. This related to the Hollywood Sportbook refund in Programme 2: Sustainable Resource Management.

The Minister replied that the three vacancies on hold related to the Department of Economic Opportunities and Tourism and not to the Provincial Treasury.

Ms Analiese Pick, Acting Chief Director Provincial Government: Public Finance, Western Cape Provincial Treasury, explained that bursaries would fall in the category of “Households”, when a benefit was accrued to an individual.

Ms Julinda Gantana, HOD: Western Cape Provincial Treasury, said that the leave gratuity did not relate to early retirement. It was in respect of an individual who left and the Department was still busy with the exit process. Challenges in the recruitment policy resulted in vacant posts. Unallocated amounts are hosted in Programme 2 and allocated in the adjustment budget until programmes were identified. The National Treasury indicated that less than 10 000 people applied for early retirement. An increase in the number was not expected. The Department had the lowest Compensation of Employees (COE) budget and managed to curtail it. The Gambling industry was required to pay various taxes to the Provincial Revenue Fund in terms of Gambling Board legislation. The refund of R571 000 related to a particular incident with the Hollywood Sportbook. In terms of a court ruling, the Provincial Treasury was required to pay back the refund. An argument was made in the arbitration court that the overpayment was made in good faith. The software package used by Hollywood Sportsbook incorrectly determined the tax payable.

An official from the Department said that municipalities that performed well were rewarded with a Governance Incentive Grant. The criteria to qualify for the grant were open to all municipalities. A R10 million grant was awarded for the first year.

Ms Annamarie Smit, the Chief Financial Officer (CFO), Western Cape Treasury, said that the Bursary Programme was not for employees but for young people not yet in employment. Grade 11 learners write and submit economic essays to the Treasury as part of a competition. Some of them who qualify for a bursary from the Department would decline it if they got better offers from other companies.

Mr Mvimbi queried the R760.4 million adjustments. He asked whether there was a miscalculation of R55 million as the figures did not add up.

Mr van der Westhuizen asked what happened with the R50 million drought relief funds that were dispensed. He enquired whether the funds were released by National Treasury. He asked about available options for the hard hit rural areas.

Ms Nkondlo queried whether it took two months to fill a vacancy. She asked for an explanation of supplier evidence submitted at the Client Walk-in Centres. She queried whether the Western Cape supplier database would be replaced or whether suppliers needed to comply with both the National and Provincial database requirements.

Ms Gantana clarified that the R50 million was for fodder. The Department was pursuing funding from the National Government. Should the delay persist, it would be expedited to the National Treasury. The position would be reassessed in 2020.

Ms Nadia Ebrahim, Acting Chief Director: Asset Management, Western Cape Treasury, explained that the Western Cape Government managed an e-procurement database since 1999. In 2015, the National Government introduced a central database for all organs of state. A mechanism was created to enable suppliers to submit a consolidated set of documents. To reduce the red tape, Western Cape suppliers submitted documents only once a year for tenders below R500 000. Suppliers needed to be registered on both databases.

The Acting Chief Director Provincial Government: Public Finance agreed that the listed adjustments did not add up. The reason was that only big ticket items were listed.

Ms Ebrahim explained that the offices of SAP, a software company, were being used as Client Walk-in Centres. SAP discontinued the service for in-house evidence collection after they exited the contract. Clients may still go the offices for support. Rebranding of the offices was planned.

The meeting was adjourned.

Voting

The Bill was unanimously adopted by the Committee without amendments.

Adoption of Outstanding Minutes

Committee Minutes dated 12 November 2019 at 9h00

The minutes were adopted with no amendments.

Committee Minutes dated 12 November 2019 at 12h00

The minutes were adopted with no amendments.

Committee Minutes dated 20 November 2019

The adoption of the minutes was postponed based on the resolution below.

Committee Minutes dated 22 November 2019

The minutes were adopted with no amendments.

Tabling of Annexures

The annexures were adopted by the Committee.

Resolution

Ms Nkondlo requested that the minutes reflect the engagement with the private sector and the unions.

The Chairperson agreed that the private sector should be included and asked whether Ms Nkondlo wanted a distinction to be made between private and banking sectors.

Mr van der Westhuizen said that he could not recall forming a resolution but suggested that a workshop be arranged.

Ms Nkondlo asked whether this was not standard procedure.

The Chairperson replied that there were no guidelines or standard procedures.

Mr Mitchell suggested that the issue be placed on the Committee programme for next year.

Mr van der Westhuizen proposed the Procedural Officer examine the minutes to determine what happened in the meeting.

The meeting was adjourned

Documents

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