North West, National Treasury, Auditor General on NWPG fiscal position

Ad Hoc Committee on North West Intervention

$27$ June $2018$

Chairperson: Mr C de Beer $($ANC$,$ Northern Cape$)$

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Meeting Summary

The Ad Hoc Committee on the intervention at the North West provincial government was briefed by the National Treasury, the Auditor General $($AG$),$ and the province on its fiscal position, governance and financial management.

The province had been placed under administration by the Cabinet, and was now being monitored by an inter$-$ministerial task team. The Committee underscored the importance of North West adopting an action plan to address the findings of the Auditor$-$General $($AG$),$ to assist the province in its turnaround strategy, but was dismayed at the manner in which public finances had been handled in the province. Members expressed displeasure at the manner in which the Office of the Premier had centralised services that should have been performed by the provincial Department of Local Government, and other provincial departments. This had resulted in the Office of the Premier being an implementing agent instead of conducting monitoring and evaluation over the Provincial Government.

The National Treasury said the Office of the Premier had suffered pervasive irrational executive decisions and poor financial decisions as far back as the $2014/15$ financial year. Among governance decisions that were questioned was the fact that the North West Parks and the Tourism Board had been shifted to the Office of the Premier in $2014/15.$ It listed the failure to provide oversight and leadership in service delivery and the intimidation of provincial departments as challenges affecting the province. It highlighted major instances of irregular expenditure and under$-$spending. In its view, the provincial government's greatest weakness was not a lack of funding, but poor supply chain management. The problem lay with decisions taken under the political leadership of the former premier, Mr Supra Mahumapelo, as well as a lack of skills, mismanagement, the rapid turnover of heads of departments, and the sometimes deliberate flouting of the rules meant to ensure public funds were spent for the public good. The warning signs of the financial crisis in the Province had been there, but no action had been taken.

The Auditor General acknowledged that some of the non$-$compliance with spending prescripts was due to incorrect interpretation of laws and regulations, but this was not generally the case. In most instances, it was found that it was essentially a deliberate disregard of compliance to laws that required to be attended to$,$ particularly in the supply chain area. As a key monitoring and oversight department, the Premier$$s office should have set an example of good governance and accountability. The lack of improvement in audit outcomes indicated that the provincial leadership was not interested in taking remedial and corrective measures and that overall there was poor accountability and consequence management. Focused political will and considerable investments in monitoring and oversight were required to turn around the audit outcomes of the province.

The Committee encouraged more stringent oversight by the oversight institutions including the