Cash crisis deepens for Eastern Cape Health and Education departments

The future of the two biggest provincial departments in the Eastern Cape is growing increasingly bleak, as their requests for billions of rands of additional funding has been denied.

These cash-strapped departments applied for unprecedented extra funding, as part of the latest adjustments budget, to cover ever-growing costs, but Provincial Treasury simply could not meet their needs with the finances available.

The situation is so dire that, unless immediate action is taken, it is an almost forgone conclusion that these departments will collapse, and service delivery will grind to a halt.

During a Provincial Finance Committee this week, the Provincial Treasury painstakingly explained how dire the situation has become.

Health and Education, combined, have requested close on R11 billion in additional funding, which excludes additional national adjustments to equitable share, provided by the national government.

The Health Department has requested an additional R5.204 billion for the current financial year, of which R4.4 billion was for accruals and payables.

The Provincial Treasury noted that they could only provide R280,7 million in additional funding for Health, roughly 4.4% of what was asked for.

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Suppliers across the province that have already done work for the Department, and have not yet been paid, will have to wait until the new budget allocations in April before receiving any funds.

Critical medical supplies for the rest of the financial year could very well be delayed, as the Department does not have the money to pay for them!

The Department of Health is factually insolvent and currently unable to meet its financial commitments for the financial year.

The financial situation in Education is just as bad, with an additional amount of R5.722 billion requested by the Department in the Adjustments Budget, but Provincial Treasury was only able to allocate an additional R307 million (5.4%).

The Education Department is so cash-strapped that it cannot deliver textbooks and stationery to schools, leaving many schools in dire straits.

“Both Departments have been berated for their continued disregard of the Provincial Appropriation Act, by overspending the voted budget and resulting in unauthorised expenditure; for continued shifting of funds from non-negotiable items to other areas; negative audit opinions on the predetermined objectives as well as on the regulatory audit,” said Retief Odendaal, the Democratic Alliance Shadow MEC for Finance on the Eastern Cape.

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