Framework to assist departments in distress

Wednesday, October 24, 2018

National Treasury will develop a framework to address governance and financial performance for national departments in distress.

In the Medium Term Budget Policy Statement (MTBPS) tabled in Parliament on Wednesday, Treasury said government will intensify its efforts to improve spending efficiency, increase capacity and improve governance.

“Over the next 12 months, National Treasury will develop a framework to address governance and financial performance in national departments that are in distress, as prescribed by the Public Finance Management Act (1999) and the Constitution,” said Treasury.

It said while South Africa’s budgets for social and economic services are substantial, the quality of spending is in many areas unacceptably poor, undermining, and in some cases collapsing, service delivery.

“Poor governance, reflected in inefficiency, corruption and financial mismanagement reduces the impact of spending and increases pressure on the budget. Government has begun the process of rebuilding important state institutions.”

These failures, Treasury said, are beginning to be addressed.

Treasury said government projects total expenditure of R5.9 trillion over the 2019 MTEF [medium-term expenditure framework]. Spending will grow by an average of 7.8% a year, reaching R2.1 trillion in 2021/22.

Despite moderate economic growth projections, spending growth will outpace inflation, with real non-interest expenditure growth expected to average 1.9% over the period. - SAnews.gov.za

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