Government is paying out R3 billion to cover 10 years’ worth of blown budgets
The new Finance Act signed off by president Jacob Zuma last week is allowing the government to reclaim almost R3 billion from the National Revenue Fund, by authorising previously unauthorised expenditure by state departments.
The Finance Bill allows for the authorisation of unauthorised expenditure as a direct charge against the National Revenue Fund. It was one of 6 other finance Bills signed into law by President Jacob Zuma last week (12 January).
The document acknowledges that R2,908,502,358 in unauthorised government expenditure by state departments took place over the past 10 years, and detailing which departments blew the budget, and how much they are claiming back.
Unauthorised expenditure occurs when a governmental department or body overspends its annual financial budget. This happens due to a number of factors including under-funding, unexpected expenses, poor management as well as bribery and corruption.
Notably, the Bill only allows for amounts to be claimed from the National Revenue Fund on approval from Parliament, with certain amounts being put to vote.
Below is a breakdown of the amounts being claimed, and where the money was spent.
The following will be deducted directly from the National Revenue Fund in the 2016/17 financial year. It accounts for R1,51 billion of the total expenditure:
Home Affairs – R900 million
- R53,002,000.00 was overspent on the Back Record Conversion 4 project, the digitisation of manual fingerprints as well as the payment of outstanding claims between 2004 and 2006.
- R687,304,271.57 was overspent in 2010/11 on various costs relating to the overhaul of the Home Affairs National Information System as well as things like the consultants, legals fees and others.
- R160,394,000.00 was overspent in 2012/13 on the modernisation of equipment, and other items that were not initially provided for in the department’s budget.
Transport – R609 million
- R609,125,096.47 was overspent between 2008 and 2009 on bus subsidies.
The exact amount deemed claimable of the following will be put to vote. It accounts for R1.4 billion of the total expenditure:
Home Affairs – R187.5 million
- R46,881,000.00 was earmarked for Information Technology capital projects during the 2005/06 financial year.
- R140,640,282.92 was earmarked for the Information Systems Modernisation Project (Who Am I Online) during the 2012/13 financial year.
Water Affairs – R3.8 million
- R3,782,000.00 was earmarked to cover expenditure on research study, goods and services and regional service council levies
Transport – R1.2 billion
- R844,979,607.76 and R362,394,100.24 was spent during the 2008/09 and 2009/10 financial years respectively, due to the overspending on bus subsidies.
Read: 6 new finance bills have been signed into law – this is what they are
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