Concern has been raised about the 30-day approval process that has been put in place if political parties and the media want to conduct visit to schools in KwaZulu-Natal. Picture: Independent Newspapers Archives
Image: Independent Newspapers Archives
The finances of the Department of Education in KwaZulu-Natal are in a shambles and it has been instructed to reduce its spending, including halting the awarding of any new tenders.
The department has been instructed by the Provincial Treasury in a letter to stop the awarding of any new contracts or orders that would result in new financial commitments, given its financial position. The letter, seen by The Mercury, was directed to the Head of Departments, Nkosinathi Ngcobo.
The department's spokesperson, Muzi Mahlambi, said they are aware of the letter, stating that the department is engaging the Treasury on the issue.
The letter details the severity of the department's challenges, including that the department owes R600 million to the Department of Public Works and does not have enough money to manage some of its critical functions.
The Provincial Treasury has written to the department, stating, “The Department of Education has written several letters to the Provincial Treasury highlighting their financial challenges and consistently requesting additional allocations of funds, despite being fully aware that the Provincial Treasury has no surplus funds to allocate for these purposes.”
Furthermore, the letter notes: “The department has also not demonstrated any real effort to reduce its spending and instead continues to commit the department to contracts and commitments for which it does not have the funding, due to excessive carry-through effects of the accruals incurred by the department.”
Several engagements have been held between the department and the implementing agent, the Department of Public Works and Infrastructure, but to date, no resolution has been reached regarding the outstanding amounts owed for the 2024-2025 financial year, which amount to over R600 million.
“As we enter into the new financial year, the concern is that the department may enter new contracts with additional obligations without settling their current creditors, further exacerbating their financial position. As the accounting officer, you are reminded of your responsibilities in terms of the PFMA (Public Finance Management Act) to ensure the department manages its resources, settles all payments within 30 days, and does not overcommit the department.
"Your recent correspondence regarding learner transport is of further concern, as you have indicated that commitments have been made in excess of the available budget, which is tantamount to financial misconduct. You would be aware that in 2025-2026, to cater for additional budget pressures, an additional R50 million will be allocated to the Department of Transport specifically for scholar transport.
I would therefore urge the department to rationalise the service and ensure they deal with inefficiencies and leakages in the system, as highlighted by the research conducted by the Provincial Treasury. Furthermore, more money is required to reallocate funds from within to top up the allocation as required."
The letter also issued a dire warning to the department, pointing out that the PFMA gives the Provincial Treasury certain powers and responsibilities that include that “the treasury must exercise control over the implementation of the provincial budget, promote and enforce transparency and effective management in respect of revenue, assets, liabilities, and expenditure.”
It warned that it has the power to intervene by withholding funds to address issues that are a consistent material breach. These measure will remain in force until the department resolves its dispute with Public Works and Infrastructure, provides a detailed analysis of all its creditors, and outlines how it will settle with them.
“The department has been instructed by the Provincial Treasury to halt the issuing of any new contracts or orders that would result in new financial commitments, given the financial position of the department. Any official who fails to adhere to this instruction will be committing financial misconduct,” said the letter.
The Provincial Treasury issued further restrictions on the department, warning that any funding for infrastructure will be ring-fenced to ensure that payments are honoured. “The Provincial Treasury takes this matter seriously and urges the department to do the same,” the letter warns.
Member of the finance committee, Lourens De Klerk, said "Their problem is that they do not have money, and they are not taking action to put strong financial controls in place. More than 90% of their budget goes to salaries, and the rest is eaten up by budget cuts, unfunded salary mandates, and failure to pay their bills on time."
Sakhile Mngadi, DA spokesperson on Education, expressed concern over the continued financial woes of the Department. “We welcome the mild financial administration that the treasury has imposed on the department to get it back on track,” he said.
KZN MEC for Finance, Francois Rodgers, elaborated on the state of the department. “The Department of Education (DoE) had projected to overspend by R1.1 billion in the February In-Year Monitoring report. Further to this, there were invoices totalling R1.6 billion that had been captured on the Basic Accounting System that could not be released as they had no funds left to pay these invoices.”