'Dirty tricks' muddy Limpopo finances

Finance Minister Pravin Gordhan yesterday announced major interventions - specialised courts and forensic investigations - to clean up the rot in Limpopo.

This comes barely six weeks after President Jacob Zuma announced central government involvement in five provinces whose finances were in serious disarray.

Speaking at a media briefing in Polokwane, Gordhan accused some in the Limpopo government of "sabotage" after service providers were told not to honour their contracts because they might not be paid.

Gordhan said forensic investigations would start next week to deal with the financial mess.

Limpopo's finances have deteriorated to the extent that at one point the province was almost unable to pay its entire workforce.

Gordhan said "national government had to take emergency measures towards the end of 2011 because, technically, the Limpopo province was bankrupt.

"On November 22 it became clear that the province would not be able to pay teachers, doctors, nurses, social workers, service providers and other public-sector employees. The province has been spending beyond its means. This has to stop."

Gordhan revealed that:

• Limpopo will end the current financial year with a R2-billion shortfall;
• The province's dismal financial state is the result of unauthorised expenditure, which grew from R1.5-billion in 2009 to R2.7-billion in 2011;
• Accruals from unpaid service providers grew to about R500-million by the end of March 2011;
• The province had wiped out its overdraft of R757-million in November and was asking the Treasury to increase it to R1.77-billion;
• Some service providers were being paid eight times in one month; and
• On many occasions payment was demanded without supporting documentation, such as invoices and contracts.

Gordhan said the Treasury refused the province's request, saying "unless urgent action is taken by the province to address these issues the Limpopo treasury is likely to preside over serious failure of public systems and process for service delivery".

The intervention team, said Gordhan, has also uncovered evidence that service delivery in the province was sabotaged so as to lay the blame at the door of national government administrators.

"There is sufficient evidence that service delivery was sabotaged in order to blame non-delivery on the national intervention."

He said this after reports that service providers refused to deliver food to hospitals, saying they had heard that the provincial government would not pay them.

Gordhan, however, would not identify those responsible for the breakdown of services.

Gordhan's intervention has in recent weeks been labelled a "political plot" to undermine Limpopo ANC members opposed to Zuma's leadership.

Gordhan said: "I can't manufacture these things; facts have spoken for themselves.

"The facts will continue to speak for themselves in coming months.

"Let the public be the judge. I have no time for politics in this."

The minister said that though he was happy with Limpopo Premier Cassel Mathale's cooperation, he was concerned about the resistance of some members of his executive committee.

The National Council of Provinces is entitled to review the intervention in six months, said Gordhan.

"For now, we will be here for as long as it will take."

Mathale said yesterday that his administration will cooperate with Gordhan.

The DA and trade union federation Cosatu welcomed Gordhan's intervention yesterday.

But DA MP James Lorimer questioned why the Treasury had delayed taking action when R1.5-billion of unauthorised expenditure was identified in Limpopo as far back as 2009.

"This inaction has led to the complete collapse of Limpopo's public service infrastructure. This should be a lesson to the government."

Cosatu spokesman Patrick Craven said action taken against the Limpopo administration "will set a precedent".

"If evidence exists in other parts of the country, similar action will have to be applied," Craven said.