KZN on a financial tightrope

The range of new South African banknotes, featuring the smiling face of iconic statesman Nelson Mandela, with Five Rand and Two Rand coins.

The range of new South African banknotes, featuring the smiling face of iconic statesman Nelson Mandela, with Five Rand and Two Rand coins.

Published Mar 18, 2024


Durban — KwaZulu-Natal government departments have to embark on a belt-tightening exercise which will include the freezing of posts, as the province has lost over R300 million of its 2024/25 budget allocation.

The provincial treasury has cited the equitable share formula which it said was not applied in the province’s favour as the reason for the loss of the money.

“KZN lost R334.5 million in terms of its equitable share allocation in 2024/25, R109.1 million in 2025/26 and R189.4 million in 2026/27,” treasury spokesperson Thubelihle Vilane said this week.

He said that the budget cuts were significant, and departments were forced to review their spending for the new financial year.

“The equitable share is the main source of revenue for provinces and is allocated via a formula using objective data. The formula is largely population-driven, designed to ensure fair, stable and predictable revenue shares, and to address economic and fiscal disparities,” he said.

Vilane said that with the budget cuts departments were set to undertake measures which included:

  • Some of the posts would not be filled.
  • Holding meetings virtually in order to cut down on travel costs.
  • Reducing internal training programmes.

Meanwhile, the IFP has expressed reservations following a revelation that only four municipalities had received clean audits for the past financial year.

The news was revealed by Auditor-General Tsakani Maluleke to members of the provincial legislature (MPLs) this week when she applauded some of the strides that had been made by the legislature in ensuring that there was greater compliance with rules on the spending of public funds.

Umlalazi, Umhlathuze, Okhahlamba and King Cetshwayo are the municipalities that got clean audits. IFP MPL Mntomuhle Khawula said while he noted the AG’s positive remarks, the number of municipalities with clean audits in a massive province such as KZN warranted alarm.

“I am not happy. We cannot have so many municipalities and yet have four clean audits. To me it is not a good picture,” said Khawula.

He questioned the capacity of the public accounts committee, pointing out how experience had demonstrated that if such committees were strong enough to carry their oversight role, incidents of abuse of public funds were minimal.

ANC MPL Thulani Xulu said it was encouraging to see some municipalities showing an improvement, saying it demonstrated that the Co-operative Governance and Traditional Affairs (Cogta) department was providing assistance, enabling them to improve on their performances.

“Yes, we agree that there is room to improve by most municipalities but we must appreciate the assistance and the good work that has been done by Cogta in helping improve the situation,” said Xulu.

Maluleke told MPLs that while municipal public accounts committees (MPACs) had been established at municipalities across the province, most of them were yet to reach the optimum level of performance, and this was one of the reasons for poor performance by other municipalities.

She added that institutional stability and filling of key positions in municipalities also played a role in the performances at local government.

“This tells us that we are yet to reach optimum level of investment in terms of the capacity and impact of MPAC. Similar to disciplinary boards, most of the municipalities have established them but they are yet to reach full capacity,” said the AG.

Maluleke advised that MPLs should discuss how council speakers prioritised the work of MPACS and ensured that they were provided with all the support possible to enable them to perform well.

“The MPACs are not where they should be but there is room to ensure that internal audits, speakers and others assist in order to ensure full capacity of MPACs,” the AG stressed, noting how the overall audit outcomes in the last three financial years showed an improvement.

She acknowledged how Cogta had been instrumental in ensuring the improvements in municipalities by deploying senior official who assisted with the turnaround plans for the municipalities that had been struggling.

According to Maluleke, it was encouraging to see that many municipalities in the province were not getting disclaimer audit opinions.

This one of the worst findings that the AG’s office can make about a structure, as it normally means that there were no supporting documents to confirm claims of any expenditure.

Sunday Tribune