The management of the social development department was confident in defending the R15bn unauthorised expenditure it incurred in the 2019/20 financial year, saying the money was spent on grants and was not mismanaged.
Explaining how the department’s financial books landed in the red, acting director-general Linton Mchunu told parliament's standing committee on public accounts (Scopa) on Tuesday this was a result of overspending. The department had paid April 1 2020 grants in March 2020 due to the Covid-19 outbreak.
The government departments' financial years end in March and begin in April. Paying the grants in March 2020 for April 2020 led to the department overspending on its budget by 108% for that financial year because there was no budget available for it.
Mchunu said the department was advised to pay the grants earlier and on staggered dates to avoid a lot of people flocking to payment points on the same day during the coronavirus outbreak.
“There was guidance from the president [Cyril Ramaphosa] that we should pay the grants early. The early payment for the April 2020 grants were done in conjunction with the National Treasury and the National Joint Operational and Intelligence Structure based on a risk assessment that was done to prevent the spread of the pandemic through ‘super spreaders’. Everyone wanted their money before the hard lockdown,” Mchunu said.
Mchunu said the R15bn went into payment of grants and was not mismanaged by the department.
“There was no poor planning, no mismanagement of funds and there was no negligence from the department. This was a response to an emergency situation of Covid-19 that we had to undertake. We received concurrence from the Treasury that we could indeed pay grants early.”
Mchunu said the spending was regarded as unauthorised because overspending according to government regulations was deemed as such. Despite getting the green light from Treasury on the overspending, Mchunu said, the funds had to be recorded as unauthorised because the department's amendment to the budget had not been approved in parliament.
Department CFO Fanie Esterhuizen said before the department made the move of overspending it had sought approval from the National Treasury.
“Where you see the R15.1bn in over expenditure is because we could not fund it, the budget for 2019/20 process had been concluded. We followed due process and engaged with the Treasury and got relevant authorisation to ensure that the department was able to go on overdraft to ensure that we pay the grants on the 30th,” Esterhuizen said.
WATCH | Department explains how R15bn spend was not really 'unauthorised'
The management of the social development department was confident in defending the R15bn unauthorised expenditure it incurred in the 2019/20 financial year, saying the money was spent on grants and was not mismanaged.
Explaining how the department’s financial books landed in the red, acting director-general Linton Mchunu told parliament's standing committee on public accounts (Scopa) on Tuesday this was a result of overspending. The department had paid April 1 2020 grants in March 2020 due to the Covid-19 outbreak.
The government departments' financial years end in March and begin in April. Paying the grants in March 2020 for April 2020 led to the department overspending on its budget by 108% for that financial year because there was no budget available for it.
Mchunu said the department was advised to pay the grants earlier and on staggered dates to avoid a lot of people flocking to payment points on the same day during the coronavirus outbreak.
“There was guidance from the president [Cyril Ramaphosa] that we should pay the grants early. The early payment for the April 2020 grants were done in conjunction with the National Treasury and the National Joint Operational and Intelligence Structure based on a risk assessment that was done to prevent the spread of the pandemic through ‘super spreaders’. Everyone wanted their money before the hard lockdown,” Mchunu said.
Mchunu said the R15bn went into payment of grants and was not mismanaged by the department.
“There was no poor planning, no mismanagement of funds and there was no negligence from the department. This was a response to an emergency situation of Covid-19 that we had to undertake. We received concurrence from the Treasury that we could indeed pay grants early.”
Mchunu said the spending was regarded as unauthorised because overspending according to government regulations was deemed as such. Despite getting the green light from Treasury on the overspending, Mchunu said, the funds had to be recorded as unauthorised because the department's amendment to the budget had not been approved in parliament.
Department CFO Fanie Esterhuizen said before the department made the move of overspending it had sought approval from the National Treasury.
“Where you see the R15.1bn in over expenditure is because we could not fund it, the budget for 2019/20 process had been concluded. We followed due process and engaged with the Treasury and got relevant authorisation to ensure that the department was able to go on overdraft to ensure that we pay the grants on the 30th,” Esterhuizen said.
READ MORE: