KZN education department receives R2bn bailout

National Treasury has given the cash-strapped KwaZulu-Natal education a R2bn bailout.

KZN Treasury said it obtained the advance from the National Treasury to ensure the department met its critical obligation of transferring norms and standards payments to schools in the province.

The crucial bailout comes amid a dire warning by education head of department Nkosinathi Ngcobo to unions and governing bodies on Monday that schooling would be severely affected unless it received a multi-billion rand advance.

Provincial finance MEC Francois Rodgers said, “This intervention demonstrates our unwavering commitment to protecting service delivery in the education sector”.

The funds, which were approved on Tuesday, will ensure that payments to schools are not disrupted.

“The provincial fiscus remains constrained; however, this front-loading advance does provide some immediate relief to the education sector,” said Rodgers.

Priority is to be given to settling historic debt due to funding limitations.

National Professional Teachers Organisation of SA KZN chairperson Thirona Moodley said while the cash advance provided much-needed temporary financial relief to schools, it was not sustainable.

It called for an investigation into allegations of mismanagement which led to the education department’s fiscal failure.

“Our schools depend on departmental funding for all their operational expenses. Fee-paying schools are also experiencing serious financial challenges due to parents being unable or unwilling to pay school fees. While this intervention will stabilise the department for now, there must be a sustainable long-term solution to this crisis,” she said.

Moodley said steps taken by the provincial treasury to place a provincial auditor-general representative within the department will assist in improving accountability and financial oversight.

“The delays and failures in paying schools their norms and standards allocations directly impact schools, as textbooks, stationery, and other essential resources cannot be purchased.

“This department has historically been underfunded by the National Treasury. The KZN education department is the largest in the country, with about 6,000 schools. This underfunding has been compounded over many years, leading to the serious crisis the department finds itself in today.

“Apart from the underfunding, there are also allegations of mismanagement that have worsened an already difficult situation. These allegations must be thoroughly investigated, and consequence management must follow where wrongdoing is found,” Moodley said.

Provincial education MEC Sipho Hlomuka said the department had made multiple representations at various levels, including national government, to highlight the financial predicament.

“We welcome national government, the minister of finance and National Treasury’s appreciation of the depth and seriousness of the financial challenges confronting the department after years of sustained budget cuts and austerity measures from 2020/21 to date, totalling R28bn.

“These reductions have placed immense strain on the ability of the department to fully meet its obligations and adequately support schools, educators, learners, and critical programmes aimed at improving educational outcomes.”

Hlomuka said while this cash flow advance provides much-needed temporary relief and will assist in stabilising operations at school level, it is not a permanent solution to the structural financial challenges facing education in KZN.

“The province continues to carry significant pressures arising from compensation of employees, learner growth, infrastructure backlogs, scholar transport demands, and the rising costs associated with delivering quality education. Without an additional allocation of funds and a permanent solution to the funding gap, the sector will remain in the same precarious position.”

He said the advance didn’t cover some payments due in November and no further financial aid will be received from the provincial treasury, as the full amount has already been advanced.

“As a result, delays in payments to service providers and for LTSM will persist, leading to the accumulation of new debt in the following financial year.

“The department therefore reiterates its call for National Treasury to work collaboratively with provinces in finding a sustainable long-term solution for funding basic education.”

Hlomuka said austerity measures and expenditure constraints imposed over several years required urgent review, particularly in sectors such as education that are central to the country’s social and economic development.

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