R908m education top-up defended
Durban - The cash-strapped KwaZulu-Natal Education Department’s finances have come under scrutiny after a report that it got R908 million more from the National Treasury to pay salaries.
City Press reported on Sunday that according to an expenditure report for the first six months of the 2015/16 financial year, the department was in financial trouble and had to request the additional funds from the national and provincial treasuries, most of which was spent on salaries and administration.
But the education and financial portfolio committees in the provincial legislature said the assistance by the national and provincial treasuries was not an unusual occurrence, and did not point to signs of a financial crisis in the department.
The Sunday newspaper report suggested that the South African Democratic Teachers Union forced the department to “create positions” without a budget, but the union has denied this.
In its 2014/15 annual report, the department said its “biggest cost pressure” was the compensation of employees.
According to the annual report, it moved R860m from its infrastructure development programme to pay salaries, which was “reflecting extreme spending pressures”.
An additional R355m was paid from the provincial Treasury that year to assist the department with payments for infrastructure.
On Sunday, education portfolio committee chairwoman Linda Hlongwa said that while she could not comment on the accuracy of what had been reported, it was not uncommon for the department to get such “top-ups” to deal with salary increases.
“This is not something unheard of. It is known that the department gets assistance. It has been happening for four to five years.”
Hlongwa said the department was doing “fairly well” in the management of its finances.
“The last audit report showed that there was an intention to work hard on their finances.”
Asked if the department should be placed under administration, Hlongwa replied: “The department cannot be placed under administration because it has not shown that it is failing.”
While City Press suggested that the department had at times spent 90% of its budget on salaries, Hlongwa said she was aware of salaries taking up 83%.
“The wage bill is not a problem peculiar to this province, it’s a national problem.”
Sipho Nkosi, the chairman of the finance portfolio committee in the provincial legislature, agreed that the department’s work was “labour intensive”, and that paying salaries would always be a challenge.
He said the department was severely underfunded and calculations done in 2013 by the committee and provincial Treasury showed that it had a shortfall of about R5bn.
Nkosi said this led to the department getting an increase in its budget in the 2015/16 financial year to R42bn from R39.4bn the previous financial year.
“We cannot blame the department because they have been saying for years that they are underfunded. Last year, there was an attempt to meet them halfway with about R3bn added, but it’s still falling short. However, if they were to get 100% of their shortfall, then other departments would collapse.”
Speaking on the department’s financial health, Nkosi said that for the first time in several years it had received an unqualified audit in the 2014/15 financial year.
“There has been a lot of improvement and the auditor-general’s report reflects that. In previous years, they got qualified audits with lots of queries,” he said.