THE Eastern Cape and North West provinces are drowning in financial chaos and service delivery failures, according to damning findings presented to Parliament by the Auditor-General of SA (Agsa) and the National Treasury.

The reports, delivered during a National Council of Provinces (NCOP) Finance Committee briefing on April 8, revealed a disturbing pattern of regression, mismanagement, and neglect in critical sectors such as health, education, and infrastructure, among others.

At first glance, the Eastern Cape appeared to be making progress, with nine clean audits in the 2023/24 financial year. However, beneath the surface lay a province in distress.

Three government departments received qualified audits, indicating serious discrepancies in their financial statements. Key institutions, including the Office of the Premier and the Provincial Legislature, regressed, while sectors such as sports, arts, and culture continued to deteriorate.

The investigation by Agsa uncovered shocking inefficiencies in infrastructure projects. Completed buildings stand empty, construction quality is substandard, and unnecessary delays plague development initiatives. Invalid variation orders — changes to project contracts that inflate costs — have further drained public funds.

Performance reporting in critical departments such as health and education is unreliable, leading to missed targets and unfulfilled promises. Schools failed to meet 80% of their infrastructure delivery goals, while district health services fell short on 54% of their performance indicators.

Scholar transport remains a hazard, with overcrowded, unsafe buses lacking basic safety equipment like fire extinguishers.

Agsa’s head of portfolio, Vanuja Maharaj, did not mince words: “The underutilisation of completed projects, shoddy construction, and financial waste are unacceptable. Schools and hospitals are crumbling because maintenance is neglected, forcing costly early refurbishments.”

Meanwhile, the North West has seen marginal improvements in financial reporting, yet, its overall governance is in freefall. The province’s road network is disintegrating, despite a R1.2 billion budget allocation — R204 million of which went unspent due to poor planning and procurement failures.

Hospitals such as Brits and General De La Rey are in shocking disrepair, with broken elevators, water-damaged ceilings, and malfunctioning security gates compromising patient safety.

The Mmabatho Nursing College, a crucial training facility, remains incomplete due to gross mismanagement, leaving the province short of qualified nurses. Meanwhile, a low-cost housing project in Tladistad Village has stalled, with only 102 of 300 promised houses built.

Budget cuts and unpaid contractors have left nearly 200 families without homes.

Agsa’s business unit leader for the North West, Mthokozisi Sibisi, painted a bleak picture: “Scholar transport is a disaster — late, overcrowded, and unsafe. Hospitals are falling apart, denying communities basic healthcare. These failures stem from weak leadership, financial negligence, and a lack of accountability.”

The National Treasury’s report exposed deeper systemic failures. Provinces were found to be consistently underspending their budgets, with the Eastern Cape using only 92.5% of its allocated funds and the North West a mere 90.9%.

Nationwide, unpaid invoices totalled a staggering R37.1bn, crippling small businesses that relied on government contracts. Infrastructure spending is at a dismal 77.9%, far below the 91.7% target, exacerbating backlogs in housing, roads, and healthcare facilities.

Acting head of intergovernmental relations at the National Treasury, Ogalaletseng Gaarekwe, confirmed the dire situation: “Underspending on infrastructure means backlogs keep growing. Delays in procurement and poor planning are sabotaging service delivery.”

Committee members reacted with fury, demanding accountability for years of mismanagement. The DA’s Joseph Britz highlighted the cyclical nature of the crisis: “The same problems emerge every year. Where are the consequences for those responsible?”

The ANC’s Tidimalo Legwase echoed these concerns, stressing that Agsa reports often failed to reflect the harsh realities on the ground. “Hospitals are closing, roads are impassable — we need urgent oversight visits,” she said.

The EFF’s Mathapelo Siwisa went further, calling for drastic measures: “If provinces cannot spend their budgets or deliver services, they must be placed under administration. People are suffering while officials evade responsibility.”

Agsa called for strict consequence management, real-time project monitoring, and improved financial controls. Maharaj emphasised that without accountability, the cycle of failure would continue. “Leadership must enforce policies without fear or favour. Empty promises and unchecked negligence cannot be tolerated any longer.”

The committee has resolved to conduct urgent oversight visits to both provinces and summon premiers and MECs to explain the persistent failures. With billions wasted and lives disrupted, the question remains: Will those in power finally face the consequences of their inaction?

budget underspending

Agsa exposes provincial financial failures and service delivery collapse