Statement on Cabinet meeting of 29 March 2000

29 March 2000

Statement by Deputy President Jacob Zuma on progress in the allocation of Poverty Relief Funds

As you will remember, Cabinet decided a fortnight ago to investigate expenditure of Poverty Relief Funds by all relevant departments

This is meant to ensure that this instrument is used effectively for the purpose for which it was established: to urgently improve the conditions of the poorest of the poor.

A preliminary report on the Department of Welfare was presented to Cabinet this morning. The Minister will elaborate on its content.

What we wish to state is that the President instructed us to speed up this process precisely because of his concern, and that of government, that we should meet our mandate to improve the quality of life of the most vulnerable sectors of our society. It would be inexcusable if the meagre resources at our disposal were not reaching the intended beneficiaries.

The investigation has established that public discussion on this matter has not taken into account the positive work that has been done by the Department over the past few years.

What has not received sufficient attention, and what Cabinet was concerned to ascertain, are the following important facts:

  • R50-million of Poverty Relief Funds allocated to the Department in 1997/98 was spent. However, a number of critical lessons had to be integrated into future planning for such allocations.
  • Though much of the R203-million given to the Department in 1998/99 had been allocated to the disbursing agency (IDT), this, in strict auditing terms, was not reflected as expenditure. Precisely because they were committed, the funds were rolled over to the following year.
  • As at the beginning of March 2000 (i.e. this month), 67% of funds transferred to the IDT had been disbursed to about two thousand projects, constituting about 57% of the R243-million of the accumulated Poverty Relief Funds. In fact, only R17-million of the R293-million received by the Department since 1997 has not been committed. In other words, over 94% of funds have either reached the projects on the ground, or have been committed.
  • Payments are made in tranches on the basis of approved plans (40%), project assessment (50%) and completion of the project (10%). Therefore, because projects do not take a financial year to complete, there will naturally be a discrepancy between commitment of the funds and actual expenditure.

The experience of developing capacity in implementing new government programmes is one that we have gone through since the new democratic government was established. This is because of the new focus of this government, towards alleviating the conditions of the poorest of the poor.

While acknowledging the many weaknesses that need urgent attention, we are convinced that the Department of Welfare, and government as a whole, are handling the matter the best they can. Among the primary considerations in dealing with these disbursements, is to ensure that government is not stampeded into precipitate action that would result in widespread fraud and corruption.

Partnership between government and civil society - which the Minister has undertaken to further strengthen - will also go a long way in improving our work. Consultations in this regard, particularly with religious bodies and other NGOs, have been intensified.

Issued by: Government Communications (GCIS)