Appropriation Bill 2021: Provincial Treasury (Vote 3)

Two weeks ago, we tabled “A Budget for Hope”, which is a budget that provides hope because it supports job creation, because it builds safer communities and because it delivers well-being in the Western Cape.  

And it is a budget that provides hope because it supports our plan to defeat COVID-19, which is destroying lives, and which is destroying livelihoods, in the Western Cape. 

While they may not be on the frontline, Provincial Treasury has shown great commitment to supporting departments, especially our frontline departments, to respond quickly and efficiently to the COVID-19 pandemic. 

They have: 

• Delivered a multi-phase budget process that is agile and responsive to the crisis. In fact, in one financial year Provincial Treasury have developed and processed not one, not two, but three adjustments appropriation bills. This truly is a momentous achievement and is the first time, ever that this has happened.

They have: 

• Provided support to departments and entities to ensure a procurement process that is efficient, compliant and transparent;

And, they have:  

• Responded to changing regulatory requirements and disrupted audit processes with sound financial governance support, guidance and oversight across the Western Cape Government. 

Today we table the Main Appropriation of Vote 3: Provincial Treasury, which allocates R319.608 million in 2021/22 to deliver on four strategic objectives: 

• Integrated Provincial Governance; 
• Efficient Infrastructure Investment; 
• Strategic Supply Chain Management; and 
• Effective Local Governance. 

Integrated Provincial Governance 

Provincial Treasury continues to strengthen governance in the Western Cape through: 

• A rigorous strategic budget process; 
• Integrated management information; 
• Improved audit processes; and 
• Integrated assurance. 

And Provincial Treasury is leading from the front to strengthen governance in the Western Cape. 

Our new Fiscal Futures project, which I announced in my budget speech, will look over the horizon and determine the best options available to maintain the long-term fiscal sustainability of provincial government in the Western Cape. 

The Fiscal Futures project will build on many years of fiscal sustainability research done by Provincial Treasury to identify future risks and respond to the rapid changes in the national and provincial fiscal landscape.  

And the Fiscal Futures project also aims to connect with the New Ways of Work project, so we are less vulnerable to the sudden and far-reaching budget cuts we have recently experienced. 

Efficient Infrastructure Investment 

Provincial Treasury continues to support the delivery of infrastructure in the Western Cape to drive economic growth and create jobs.  

And Provincial Treasury is leading from the front to support the preparation of infrastructure projects in the Western Cape.  

The new Project Preparation Facility, which I announced last week, will assist departments and public entities with project preparation costs so they can create a clear, visible and well-prepared pipeline of infrastructure projects. 

We have allocated R23.8 million over the medium term for the first tranche of infrastructure projects and Provincial Treasury will issue guidelines for further applications to the new Project Preparation Facility in 2021/22. 

Provincial Treasury also continues to explore options to expand private sector investment in infrastructure in the Western Cape, including accelerating public-private partnerships, and possible borrowing under the Borrowing Powers of Provincial Governments Act (No. 48 of 1996). 

And I am pleased to confirm today that the technical support panel for infrastructure financing is currently in the final stages of development, with the final terms of reference being at an advanced stage. 

Strategic Supply Chain Management 

Provincial Treasury continues to support strategic procurement in the Western Cape by constantly evaluating our supply chains for opportunities to increase value for money, while also ensuring compliance.

And Provincial Treasury is leading from the front in strategic supply chain management in the Western Cape.  

I am pleased to announce today that Provincial Treasury is piloting two exciting projects using digital technology to improve efficiencies, transparency and accountability in our procurement, auditing and budget processes. 

The first project will pilot the use of customer service software to respond to queries raised by municipalities on any matters related to audits and reporting, with an emphasis on supply chain management.  

Artificial Intelligence will automatically direct the queries to the person responsible, while the platform itself will log and track the resolution of each query for greater accountability and transparency.  

And reports produced by the platform will provide insights into performance and highlight common issues which can be addressed through a library of Frequently Asked Questions. 

Our second project will pilot the use of Machine Based Learning technology over the medium term to rapidly scan historical procurement transactions to identify risks and project future transactions for improved budget planning. 

And finally, I am pleased to announce that we have allocated R2 million to improve our e-procurement solution, bringing it in-house and integrating it with the National Treasury Central Supplier Database and the Western Cape Supplier Evidence Bank, to make it easier for businesses, especially small businesses, to become government suppliers. 

Provincial Treasury has also led the way in procurement transparency by being the first provincial government to disclose detailed information on COVID-19 related expenditure.  

We now:  

• publish a detailed monthly Procurement Disclosure Report;  
• publish a detailed quarterly Procurement Disclosure Report; and  
• will publish a detailed annual Procurement Disclosure Report on COVID-19 related expenditure in the Western Cape.  

And we will expand the contents of the monthly, quarterly, and annual reports to include detailed information on expenditure in relation to the vaccine programme.  

Effective Local Governance 

Provincial Treasury continues to support effective local governance in the Western Cape, working closely with vulnerable municipalities to manage risks and improve their financial stability.  

And we will not hesitate to take action if laws are not adhered to or if there are allegations of mismanagement or corruption in municipalities in the Western Cape. 

A good example of this is the recent court action against the Kannaland municipality by the Western Cape government, led by Minister Anton Bredell, and the Department of Local Government, and supported by Provincial Treasury.  

It is well-known that since 2016, Kannaland municipality has been in serious financial crisis, unable to provide basic municipal services or to meet serious financial commitments.  

The municipal Council requested an intervention in terms of section 139(5) of the Constitution from the Provincial Executive who assisted in developing a financial recovery plan and appointing an administrator.  

Significant progress have been made since then, however, at the end of last year a change in municipal leadership led to an attempt by the municipality to terminate the 139(5) intervention and remove the administrator from office, undoing the good work done to improve fiscal stability in the municipality. 

Following an urgent interdict, I am pleased to say that on 19 March 2021, the Western Cape High Court ruled in favour of the Western Cape Government, to prevent, in part, what the court referred to as a “path to unlawfulness” in Kannaland.

The Provincial Treasury is also working closely with vulnerable municipalities to assist them to turn around their finances before they run into financial difficulties.

During the past financial year two municipalities were assisted to successfully correct unfunded budgets and a further two municipalities have been assisted to develop detailed budget funding plans that will enable them to adopt funded budgets in future.

The Provincial Treasury also continues to support all municipalities in the province through technical and strategic engagements and through advice on their individual budgeting, accounting and supply chain challenges.

Conclusion 

I am constantly impressed by the professionalism, dedication and innovation of Provincial Treasury, who are our behind-the-scenes heroes. 

And so, I would like to thank the Provincial Treasury’s Head Official, David Savage, and “Team Finance” for their fantastic efforts to deliver a third adjustment budget alongside a momentous main budget, which is “A Budget for Hope” because it supports our recovery plan, and it supports the fight against COVID-19 in the Western Cape.  

Watch the livestream recording here >> https://www.youtube.com/watch?v=hw14zftz-Yc