The KwaZulu-Natal (KZN) Provincial Treasury has confirmed that it has taken over the finances of the education department’s finances which have been in peril. 

In a statement released on Wednesday, the Provincial Treasury said the Education Department had overspent its budget by March this year, and this prompted the takeover of finances. 

It said Provincial Treasury has legislated powers and responsibilities in terms of the Public Finance Management Act (PFMA) as listed below:

– 18(1)(b) Treasury must exercise control over the implementation of the provincial budget; and section 18(1)(c) Treasury must promote and enforce transparency and effective management in respect of revenue, expenditure, assets, and liabilities of provincial departments

– 18(2)(g) must intervene by taking appropriate steps, which may include the withholding of funds, to address a serious or persistent material breach of this Act by a provincial department

– 18(2)(i) may do anything further that is necessary to fulfil its responsibilities effectively.

Further to an analysis of challenges facing the Provincial Department of Education, including its inability to remedy its financial situation, Provincial Treasury invoked section 18 of the PFMA against the Provincial Department of Education.

The Provincial Treasury spokesperson, Nkosikhona Duma, said it has withheld all funding to the education department, excluding funds to pay for compensation of employees’ costs, conditional grants which include the National School Nutrition Programme grant, and transfer payments to schools. 

“Any orders that are required to be issued must be approved by Provincial Treasury.

Amongst others, Provincial Treasury requested the Provincial Department of Education to provide a detailed analysis of all unpaid creditors and the repayment plan in order to ensure that the department repays existing creditors before incurring new debt,” Duma said. 

He said the Provincial Treasury further instructed the provincial education department to halt the issuing of any new orders/contracts that would result in new financial commitments for the department, given the financial position of the department. 

“It was made clear that any official who failed to adhere to this instruction would be committing financial misconduct. Provincial Treasury remains available and committed to working with the Provincial Department of Education in implementing the financial recovery plan together,” Duma added. 

robin.francke@iol.co.za

IOL

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