Education’s R2bn spend in one month raises alarm bells

The department of education in the Eastern Cape has been red-flagged for spending 39% of its capital expenditure (capex) budget in the 2016-17 financial year in a single month.

This emerged during the auditor-general’s presentation to the provincial standing committee on public accounts (Scopa) in Bhisho legislature this week.

It was in this meeting that Scopa members’ jaws dropped when told by the province’s deputy AG, Sandile Hlatshwayo, that the department had spent close to R2-billion in March – nearly ten times more than its month-to-month spending average of R200-million.

The AG told Scopa that another “concerning” spike in the department’s capex spending was noted in December 2016, when it spent R700-million despite December being the shortest month of both the academic and financial years.

The department has been able to account for only R781-million of the R1.7-billion spent in March, which raised alarm bells for both the AG and Scopa.

It remains unclear how the remaining R900-million was spent.

On the December splash of R700-million, the department could only account for R306-million – less than half.

During the March spending spree, said provincial education spokesman Loyiso Pulumani, R678-million went towards learner and teacher support materials such as textbooks, stationery and computers.

“These are delivered in November and December, with final top-ups in January and February,” said Pulumani, adding that a further R103-million went towards funding school furniture delivered to various schools at the start of the year.

Pulumani said the R326-million spent in December covered expenses for infrastructure development costs for the two months of November and December.

More than R350-million of the December expenditure remains unaccounted for.

However, at the Scopa meeting, it emerged that as a result of the abnormal expenditure, the department had sent the entire provincial administration into an inconsistent spending spike, with 16% of the provincial purse spent in March.

The province’s average month-to-month spend stands at 8% in the financial year in question.

Scopa members expressed their shock and disappointment at the unexplained spike.

Provincial treasury head of department Daluhlanga Majeke was in the hot seat to account to Scopa about the spending “abnormality”.

Scopa chairman and UDM MPL Max Mhlathi fired the first salvo: “Did you detect the abnormal expenditure by the department of education in March and December last year, and if you did, what action did you take?”

Majeke replied: “The spike in spending by education in March is one of the issues which has led to treasury having to assess and review some of the payments that went through in order to see whether the delivery achieved the targets that were set.”

Majeke then suggested that some of the spike in spending by education was due to a one-off payment of R263-million to telecommunication company Vodacom in March.

ANC Scopa member Fezeka Bayeni pressed Majeke further for answers as to what exactly the department could have paid for in March and December when there was not much happening in the education system.

Majeke instead started speaking about “opex” (operational expenditure) and cited the R263-million payment to Vodacom.

The DA lambasted the department, calling the AG’s findings “damning”.

DA MPL Jane Cowley said that the situation was in fact worse and cited the department’s exorbitant spending on consultants, who pocketed R253-million in 2016-17.

“Ironically, the AG was not able to fully audit the following components of the financial statements: assets; commitments; goods and services; capped leave and irregular expenditure, because of a lack of requisite documentation,” said Cowley. —

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