House Chairperson, the Finance Bill was tabled in Parliament on 22 February 2012, by the Minister of Finance during the tabling of the 2012 Budget.
The Finance Bill seeks to gain approval from Parliament regarding unauthorised expenditure as per the recommendation of the Committee on Public Accounts in the National Assembly.
Unauthorised expenditure contravenes the Constitution of the Republic of South Africa of 1996 and the Public Finance Management Act, Act 1 of 1999, and can only become a charge against the National Revenue Fund if authorised by Parliament. The Finance Bill provides for the authorisation of national government unauthorised expenditure arising from the 1998-99 to 2003-04 financial years as well as the 2008-09 financial year. This process is aligned to section 34 of the Public Finance Management Act.
Section 34 of the Public Finance Management Act provides that unauthorised expenditure becomes a charge against a revenue fund only when the expenditure is an overspending of a Vote and Parliament approves, as a direct charge against the relevant revenue fund, an additional amount for that Vote which covers the overspending, or if the expenditure is unauthorised for another reason and Parliament authorises the expenditure as a direct charge against the revenue fund.
If Parliament does not approve an additional amount for the amount of any overspending of a Vote, that amount becomes a charge against the funds allocated to the relevant Vote for the next or future financial years.
The Bill provides authorisation of the national government expenditure in the amount of R544,7 million, of which an additional amount of R40,3 million is recommended for the Defence and Military Veterans Vote for approval as a direct charge against the National Revenue Fund to cover overspending during the 2003-04 financial year. An amount of R20,6 million is recommended as a direct charge against the National Revenue Fund to fund the Defence and Military Veterans Vote to enable the department to clear the amount from its unauthorised expenditure account.
The Defence and Military Veterans Vote surrendered the funds to the National Revenue Fund due to unauthorised expenditure that arose from financing the activities of military museums from the 1998-99 to 2003-04 financial years, as the department did not have the authority to do so. The Defence Act, Act 42 of 2002, now provides the department with the authority to oversee and manage military museums.
No additional amount has been approved to cover the overspending of the Correctional Services Vote during 2008-09. The overexpenditure of R483,3 million will become a charge against the budget allocations of the Department of Correctional Services. This payment must be effected prior to 1 April 2015.
The Select Committee on Appropriations has considered the Finance Bill and moves that the House adopt the Bill. I thank you.
Debate concluded.
Declaration of vote:
Hon House Chair, again with reservation, the appropriation of R544,7 million to cover unauthorised and overexpenditure is supported.
The DA is concerned about the fact that some of these deviations took place in the 1998-99 financial year, some 13 years ago, and are only now being presented for authorisation. Why has it taken so long?
Urgent action needs to be taken by the Standing Committee on Public Accounts, Scopa, to ensure that incidents such as these are dealt with speedily and that, where required, appropriate action is taken in order to ensure that a repetition of this does not occur.
The example of the military museums is a case in point. They should have been transferred to the department long ago. Of even more concern is the fact that the criteria for the approval of these deviations require that "appropriate disciplinary steps against officials are taken".
National Treasury assured the Select Committee on Appropriations that Scopa has dealt with this matter. However, they were not able to give the committee details of what disciplinary action was taken and against which officials or what the outcome of such action was.
The question also needs to be asked: How is the Department of Correctional Services able to fund overexpenditure on overtime in the 2008-09 financial year from its current financial year's budget? It seems that the budget for this department has been fattened up to compensate for the additional R483 million, or it is, in any event, a budget already full of fat that enables it to accommodate the additional R483,8 million.
There needs to be a very careful look at this department's budget in order to ensure that in future years any fat is removed and used for productive service delivery. I thank you, House Chair.
Bill agreed to in accordance with section 75 of the Constitution.