Chairperson, hon members, we do appreciate the opportunity to talk briefly on the report of the Joint Budget Committee as it appeared in the ATCs of 23 June 2008.
This report is consistent with the terms of reference of the Joint Budget Committee, that is, to monitor on a monthly basis and to report on a quarterly basis to Parliament on expenditure incurred by national departments. The purpose of this monitoring initiative is to ascertain whether patterns of spending are consistent with the budgets of these national departments.
The monitoring of expenditure is the key means through which the NCOP and Parliament can track and respond to government performance during the year, and it provides an important basis for more detailed enquiries into policy outcomes and the scale of delivery. With reference to total expenditure, national departments spent approximately 98,5% of the allocated amount, resulting in an underexpenditure of 1,5% as compared to 2% underexpenditure in the previous financial year. We also note that the National Treasury, due to known circumstances, underspent the most, followed by the Department of Water Affairs and Forestry, as well as the Department of Housing.
With reference to total expenditure, more than 20 national departments underspent in this period under review. The major defaulting departments are the Department of Transport, Statistics SA, the Department of Social Development, the Department of Education and the Department of Health. This underspending can be attributed to the following reasons: There is a large number of unfilled vacancies; there are inadequate procurement processes; there is a lack of clarity with regard to certain functions of these departments; there are many poor projections of expenditure growth; and there are delays in procurement of goods and services, as well as the construction and renovation of key facilities - for example, Upington Hospital.
With reference to capital expenditure, departments spent 96%. Hon members will think 96% is a good performance. Listen to this! The 4% represents an underexpenditure of approximately R329 million. Now, 96%! Capital spending is comprised of five main categories, namely, buildings and other fixed assets, machinery and equipment, cultivated assets, software and other intangible assets, and land and subsoil assets. Major defaulters in this case are the Department of Public Works, the Department of Correctional Services and the Department of Home Affairs. The Joint Budget Committee observes a remarkable discrepancy between the stated priorities of these departments and their spending.
Amongst others, the Joint Budget Committee therefore recommends that departments should establish timeframes to fill their funded but vacant posts, and that the department responsible for personnel administration, that is, the Department of Public Service and Administration, should closely monitor progress in this regard. We also call upon the National Treasury to consider more stringent monitoring and enquiry processes before granting additional funding for the compensation of employees. Departments must also motivate their ability to fill vacancies within a particular budgeting cycle before additional funding over the baseline for compensation is provided.
The National Treasury should, within this financial year, develop an in- year expenditure report for mega infrastructure projects with the sole purpose of making such report available to Parliament. The first report for the first six months of this year should be tabled in Parliament by the end of October. At the same time, the Department of Public Works should co- ordinate and strengthen its relations with other departments to ensure that infrastructure is developed and adequately maintained.
These are the highlights of our report as they appear in the ATCs for your notice and action. I thank you.
Debate concluded.
Question put: That the Report be adopted.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Report accordingly adopted in accordance with section 65 of the Constitution.