Finance: Provincial, municipal grant underspending spirals

Spiralling levels of provincial and municipal conditional grant underspending over the past five years have been attributed to ‘capacity constraints’, poor planning and execution, ‘slow or late procurement’ and ‘leadership issues’. This is according to Finance Minister Tito Mboweni, whose written reply to questions from the DA’s Alf Lees also referred to the ‘disruption’ of procurement and project implementation processes by local business forums ‘demanding’ that their members supply 30% of the goods and services required for each project. Apparently, ‘most’ local businesses do not meet the qualifying criteria, notes Pam Saxby for Legalbrief Policy Watch.

At provincial level, grants for education, ‘health revitalisation’ and human settlements development infrastructure are regularly underspent. The same applies to school nutrition and ‘comprehensive agricultural support programme’ grants, where the late submission of invoices and supply chain management problems are cited as the main reasons for underspending. Disturbingly, the Minister’s response tends to point to a pattern that has been allowed to develop over the years unabated, with increasingly larger amounts underspent and either rolled over or returned to the revenue fund. No mention is made of measures being considered to reverse the trend.