Budget Speech 2014 > Improving the Quality of Public Services and Cutting Waste

Mister Speaker, this is a Budget in which circumstances dictate that we cannot add resources to the overall spending envelope. The emphasis falls therefore on ensuring that expenditure is allocated efficiently, enhancing management, cutting waste and eliminating corruption.

A series of initiatives are focused on these concerns:

•	Spending reviews are under way to examine programme performance and value-for-money, conducted by the National Treasury and the Department of Performance Monitoring and Evaluation, and by provincial treasuries.

•	The Office of the Accountant-General has stepped up efforts to strengthen the financial control environment, and has undertaken 27 forensic reviews over the past 12 months, leading to both criminal investigations and internal disciplinary action.

•	As part of efforts to combat waste, cost-containment instructions were issued in January 2014. Budgets for consultants, travel, accommodation and venue hire have been curtailed, which will contribute to savings over the next three years.

•	Forthcoming regulations will strengthen the National Treasury’s oversight of public entities by requiring compliance with reporting requirements for expenditure, revenue, borrowing and performance.

Mister Speaker, I referred in 2012 to an initiative to be undertaken jointly with Minister Nxesi and his department to review the validity and cost effectiveness of all government property leases. The exercise has exposed several deficiencies:

•	Accommodation that is unoccupied but being paid for;

•	Accommodation occupied by non-governmental entities;

•	Discrepancies between the size of accommodation occupied and what is paid for;

•	Marked divergences from market rates per square metre;

•	Procurement through inappropriate non-competitive procedures;

•	Missing or invalid lease agreements and unsubstantiated payments to landlords.

The intervention also identified a backlog of more than half of the lease portfolio reviewed. As a result of this initiative, DPW now has a turnaround strategy that will enable it to regularise the lease portfolio, while ensuring continuity of services to client departments.

Procurement reforms

The Chief Procurement Office has been established, and has made progress on several fronts. It will review high value and strategic contracts to ensure that value for money is derived and that all contracts adhere to the relevant prescripts. The review will contribute to efforts to ensure that government’s service delivery objectives are supported by the purchases of goods and services. These will include, for example,:

•	Review of contracts such as PRASA’s rolling stock tender, government leases and infrastructure projects.

•	Review SAA’s fleet procurement process as part of the drive to streamlining government processes.

•	Development of a standard lease agreement to address defects in government property transactions,

•	Standardisation of infrastructure procurement processes and documentation,

•	Creation of an inspectorate to monitor procurement plans and audit tender documents,

•	Enhanced processing of vendors’ tax clearance certificates to ensure compliance,

•	Centralised procurement of health equipment, drugs and medicines to effect savings, and

•	Analysis of the business interests of government employees.

We are also mindful of the importance of government procurement in supporting local industry and black economic development. This requires a database of South African products and black-owned businesses so that the system can foster economic empowerment and dynamically contribute to growth. And further, tougher measures are being considered to enforce the rule that small businesses in particular must be paid within 30 days.