Debate on Medium - Term Budget Policy Statement, 2012 & First Reading Debate: Adjustments Appropriations Bill by Ms Thandiwe Mfulo (ANC)

20 November 2012

Honourable Speaker
Honourable Members
Combrades and Friends

Let me take the opportunity to thank this House for the opportunity to present the Report of the Standing Committee on Appropriations on the Adjustments Appropriation Bill for 2012/13. The focal point of this presentation is on important aspects with particular reference on certain themes from which recommendations are drawn.

Overall performance

I must say at outset that the Committee supports the adjustments made on the 2012/13 budgets and encourages Departments to effectively use funds to deliver services to the people. After all budget is not about numbers but it is about the people. Having said that, I would like to draw the attention of the House to the following key areas needing improvement for better budgeting and service delivery:

Shifts and Virements

The committee support the need for flexibility in the budget process so as to keep up with changes in the projects, targets and indicators of Departments. However it is the Committee`s observation and view that certain shifts and virements made by Departments are as a result of planning challenges. For instance there is a number of Departments who request virements that are above the 8 percent minimum as per the Public Finance Management Act. Also there are shifts that are said to be due to incorrect classification of budget items; and this is an issue of planning. It is even more concerning when budgets are shifted away from infrastructure and job creating projects in the departments.

The Committee urges the National Treasury as the custodian of public finances to ensure that Departments spend according to their plans, so that there is credibility and reliability in the budgeting process.

Savings and under spending

Hon. Speaker and Hon. Members the Committee has further noted that what is declared as savings essentially emanate from under spending; and this is pervasive across numerous departments. Of concern to the Committee is that some of these under spending emanates from infrastructure and job creation related project.

The interchangeable use of savings and under spending, which is embedded in the Public Finance Management Act (PFMA) creates undue confusion and could potentially incentivise unsatisfactory spending and performance by Departments. The Committee has taken a decision to meet with national Treasury to discuss this issue at length.

Filling of Funded Vacant Posts

The Committee is very concerned about the pervasive non-filling of vacant positions across national departments. The Committee has time and again observed a pervasive ritual whereby funds originally budgeted for vacant positions are shifted away and used to fund other budget items. This, Hon. Speaker and Hon. Members is a cause for concern in that: first, it negatively impacts on the ability of government departments to deliver services to the people; secondly it negatively affects the quality and reliability department`s budgeting and planning; thirdly it hinders progress on the government`s top priority of Job creation and the President`s call for the timeous filling of vacant positions across government.

Widening Gap between Expenditure and Performance Outcomes

Lastly Hon. Speaker and Hon. Members Standing Committee on Appropriations is concerned about the widening gap between expenditure outcomes and achieved performance targets of departments at the end of each financial year. It is the duty of this Committee to see to it that this gap is narrowed down as much as possible.

The Committee supports this budget and the adjustments made; however the Committee will continue to drill down and scrutinise all bolts and nuts to ensure that the adjustment made to the budget approved by this House are not detrimental to the delivery of services to our people.


  • As part of the report, the Committee recommends that critical posts such as that of the Chief Financial Officer are filled expeditiously.
  • All departments should ensure timeous filling of all funded vacant position
  • Funds that are originally budgeted for funded vacant position, should not be shifted around

There must clear distinction between savings and under-spending.