Hon Deputy Chairperson, the Select Committee on Appropriations invited six provincial departments of arts and culture to make presentations on their third quarter spending in the 2010-11 financial year. Provincial departments of arts and culture who attended the hearings included those from the Eastern Cape, KwaZulu-Natal, Northern Cape and North West. Mpumalanga and Limpopo did not honour the invitation.
The public hearings took place on 25 May 2011. The key findings were as follows. As at 31 December 2010 National Treasury reported that only R300,4 million, or 53,5%, of the adjusted budget allocation of R561,1 million for the 2010-11 financial year had been spent. The average provincial expenditure rate of 53,5% is below the 75,0% expenditure benchmark. Only two provinces, Gauteng and Western Cape, managed to meet or exceed the third quarter expenditure benchmark.
The underexpenditure by provinces in the third quarter of 2010-11 was attributed to a number of factors, which include: challenges in the internal supply chain/procurement management processes of provinces; delays in the awarding of tenders and appointment of service providers; delays in the completion of infrastructure projects, which were attributed by the department to the Department of Public Works as a result of the contracting emerging contractors' being inexperienced, as well as the fact that some contractors experienced cash flow problems; delays in finalising service level agreements with municipalities; transfers to municipalities could not be executed due to noncompliance with the regulatory and reporting requirements of the grant framework; delays in the recruitment of staff in critical posts; high staff turnover due to the contractual conditions of employment of the grant, that is, the grant does not allow for the permanent employment of staff; and provinces' experiencing challenges in relation to the State Information Technology Agency, Sita, regarding delays in the submission of invoices for information communications technology infrastructure and systems.
The committee has observed that some of the factors contributing to the underexpenditure as reported by provincial departments are recurring challenges. The committee has requested the national Department of Public Works and the National Treasury to assist the provincial departments in resolving these challenges in order to avoid underspending of this grant.
The committee further noted that the monitoring by provincial departments of grant expenditure at municipal level was lacking.
Also, it noted the innovative way in which the North West province was proceeding in promoting library and reading awareness services by involving early childhood development, ECD, educators in the community library services grant programme.
The committee further noted the action taken by the KwaZulu-Natal and Western Cape provinces to provincialise the library service function, which will simplify the management of libraries.
The committee made the following recommendations. The provincial departments of arts and culture should, as a matter of urgency, strengthen their supply chain management units to avoid delays in the tendering processes; the provincial departments of public works should ensure that they appoint experienced contractors who will provide better services to the poorest of the poor; in cases where there are staff shortages or a high staff turnover due to conditions of employment, the national Department of Arts and Culture should provide assistance to provincial departments of arts and culture; the reporting requirements for municipalities should be strengthened to ensure that conditional grant funds transferred to municipalities are spent appropriately and adequately; all provincial departments of arts and culture should adopt the approach of the North West province and incorporate early childhood development practitioners in their community library services grant programmes; and the national Department of Arts and Culture should assist provinces in fast-tracking the provincialisation of the community library services function. Hon Chairperson, I request that this report be adopted. Thank you. [Applause.]
Debate concluded.
Question put: That the Report be adopted.