Gauteng departments are failing to spend their budgets effectively, with R1.4 billion in underspending recorded, Finance MEC Nkululeko Dunga has warned.
Dunga said weak planning, procurement problems and poor contract management are to blame for the shortfall. He cautioned that some funds could be returned to National Treasury if rollover applications are not approved.
The MEC expressed particular concern about departments responsible for infrastructure, public safety and community development. The Gauteng Department of Human Settlements underspent by approximately R180 million, the provincial legislature by R179 million, and community safety by R81 million. The Department of Agriculture and Rural Development underspent by R79 million, Sports Arts and Culture and Recreation by R46 million, and e-government by approximately R58 million.
Departments such as education and health also failed to fully spend their conditional grants. Dunga noted that when these funds go unspent or are returned, planned projects are often delayed or abandoned despite money being available.
“The reality is that Gauteng cannot continue to operate within a system where communities experience collapsing infrastructure and poor service delivery, whilst government simultaneously records both over-expenditure and under-expenditure in critical service delivery sectors,” Dunga said.
He further warned that municipal finances across Gauteng remain a major threat to the province’s financial stability, with around R173 billion collectively owed as of March. He said the real figure could be much higher due to under-reporting by some municipalities.
Dunga also confirmed he is in talks with Finance Minister Enoch Godongwana over a threat to withhold nearly R1.9 billion in funding linked to government debt. He said the national Finance Minister has indicated an intention to withhold a portion of the provincial equitable share relating to intergovernmental debt obligations, including over R808 million outstanding for more than one year.
“We have instructed the provincial treasury to prepare a comprehensive report to the minister as we have already begun engagements to explore constructive mechanisms to resolve debt owed between the province and municipalities,” Dunga said.
He added that should such withholding proceed, it “will place further pressure on an already constrained provincial fiscus and potentially affect the pace of service delivery and infrastructure commitments across the departments.”
Gauteng continues to battle the financial burden of e-tolls, with R9.3 billion paid towards the debt and another R4.6 billion expected to be paid next month.