KZN won't tolerate fraud, corruption

Monday, June 22, 2009

Pietermaritzburg - KwaZulu-Natal MEC for Finance, Ina Cronje, has warned public servants that government will not hesitate to act against those involved in fraud and corruption.

"I have no fear in indicating that those who are involved in corrupt activities in the province will be found and arrested. Our project Unembeza, which is aimed at eliminating fraud and corruption in our IT systems, particularly the payment system known as BAS, is now in full force in nearly all provincial government departments," she told the legislature on Monday.

The MEC said her department would pay particular attention to combating corruption and fraud in procurement and tender processes.

"As the Head of Treasury, I would like to reiterate this call and urge all civil servants to refrain from any form of corruption. Fraud and corruption are morally wrong and they take away resources that could change the lives of the poor," said Ms Cronje.

She said the provincial Treasury would investigate the extent to which companies owned by government officials are involved in tenders in the different government departments.

She also pointed out that no mercy would be shown to departments who overspent or underspent on critical delivery programmes.

The emphasis, she said, will be on the importance of spending within the allocated budget and working closely with municipalities and departments. "This will ensure that the people we serve obtain maximum benefit from the government services provided, within the resources available to it," the MEC said.

The department stated that the province overspent its 2007/08 budget by a net amount of R164.3 million, largely due to the R1.03 billion over-expenditure in the Department of Health. This trend continued into 2008/09.

According to recent financial statements, the province ended the financial year with a R2.34 billion net over-expenditure, largely attributed to the Departments of Health, Education and Transport.

These three departments combined over-spent by R2.57 billion in 2008/09.

"As a result of this persistent over-expenditure, the province has had to forego budgeted interest earnings and is currently servicing a huge overdraft at a cost of about R130 million per annum, at the prevailing interest rates.

"To finance this over-expenditure, Cabinet has agreed to reduce all departmental baselines for 2009/10, 2010/11 and 2011/12 by 7.5 percent of the value of their goods and services budgets," said MEC Cronje.

She said the province is now budgeting for a surplus. "This in not a surplus in the true sense of the word, but rather a saving that we have to make in order to finance the cumulative budget deficit of the previous two financial years," the MEC said.