DRAFT 1
REPORT OF THE JOINT BUDGET COMMITTEE ON A HEARING ON THE SPENDING TRENDS OF THE DEPARTMENT OF COMMUNICATIONS
Introduction
The Department of Communications appeared before the Joint Budget Committee on 22 June 2005 to account for its expenditure trends. The expenditure trends of the Department of Communications have been a cause for concern for the Joint Budget Committee for the previous three financial years.
The Department normally underspends tremendously throughout the financial year, and then spends more that 50% of its budget in the last month of the financial year. In both the 2003/04 and 2004/05 financial years, the Department spent funds in excess of R700 Million in the last month of the financial year. This resulted in the Joint Budget Committee calling the Department to appear before the Committee to present an explanation for its expenditure patterns.
Presentation by the Department of Communications
In response to the Committee’s request to explain its expenditure patterns, the Department indicated that in the 2004/05 financial year, it made a once-off allocation of R750 million to re-capitalise the post office. However, the Department did not provide the Committee with an explanation for the previous financial years.
The Department focused attention on the following factors:
Discussions
The following issues were raised and discussed with the Department:
Conclusion
The Department provided an explanation for the last financial year’s expenditure, but failed to provide explanations for the preceding two financial years. Furthermore, the focus of the Department seems to be on preventing under expenditure, and not on the quality of expenditure.
The focus of the hearing was on the expenditure planning and discipline of the Department in order to ascertain whether resources are spent in a meaningful way. However, the Department was only focused on the fact that it never reflects any material under expenditure at the end of the financial year.