Acts Online
GT Shield

Budget Speech 2015

Financial management: ensuring value for money



Honourable Members, better value for money in public service delivery depends on rigorous financial management, effective systems and an unrelenting fight against corruption.


Supply chain management in the public sector is far from perfect. There are frequent allegations of corruption and inefficiency. Against this background, the National Treasury has conducted a review of public sector supply chain management, drawing on the views and experience of government, business and civil society. The review was published last month, and is a candid reflection of our current state of public sector procurement, the reforms that are needed and the opportunities that an efficient, transparent SCM system presents.


After consultation with the Minister of Basic Education, the following reforms are in progress:


1) All books delivered to schools from January 2016 will be managed through a centrally negotiated contract.


2) With effect from May this year, all school building plans will be standardised and the cost of construction will be controlled by the Office of the Chief Procurement Officer. Too often, and for too long, we have paid too much for school building projects.


3) Routine maintenance of school buildings and minor construction works will be decentralised. This will be accompanied by measures to combat inefficiency and corruption at district and school level.


From April 2015, a central supplier database will be introduced. Suppliers will only be required to register once when they do business with the state. This will significantly reduce the administrative burden for business, especially small and medium-sized enterprises. The database will interface with SARS, the Companies and Intellectual Property Commission and the payroll system. It will electronically verify a supplier's tax and BEE status, and enable public sector officials doing business with the state to be identified. This intervention will also reduce the administrative burden for SCM practitioners and address many of the concerns raised by the Auditor-General every year.


In close collaboration with the State Information Technology Agency, a central e-tender portal will be implemented from April this year. It will be compulsory that all tenders be advertised on this portal, and all tender documents will be freely available there. Tender advertisements in newspapers and the government gazette will be phased out.


Imizamo kahulumeni yokulwa nenkohlakalo ayisoze yaphumelela uma abenzi benkohlakalo bengajeziswa futhi benganciphelwa yindawo emiphakathini yethu. Inkohlakalo yephuca abantu abampofu intuthuko nezidingo ezibalulekile inothise idlanzana lalabo abavele bedla izambane likapondo. Kuthatha umbimbi oluhlangene lwemigulukudu ukuba inkohlakalo iphumelele, ngakho kudingeka umbimbi olubambisene ukulwa nalesisihlava. Uhulumeni, abasebenzi, osomabhazinisi kanye nomphakathi.


A new approach to funding health and education infrastructure in provinces was introduced in 2013. Following a two-year planning cycle, the 2015/16 allocations for the education infrastructure grant and the health facility revitalisation grant reflect this new approach.


On top of their base allocations, provinces that meet the minimum planning standards have been rewarded with additional allocations. For instance, the Eastern Cape receives an additional R233 million due to the quality of its plans for health and education infrastructure investment. Provinces that failed to meet the minimum standards will be prioritised for assistance through the on-going Infrastructure Delivery Improvement Programme. This allocation methodology will be expanded over the MTEF period so that all provincial departments continuously improve their planning to be eligible to receive incentive allocations.


The non-payment of suppliers on time is a perennial problem that needs serious attention. This practice works against government's efforts to grow the economy and develop the SMME sector. Payment of suppliers within 30 days will now be included among other SCM requirements in the performance agreements of accounting officers.