Annexure 2: The Portfolio Committee on the Social Cluster
Following the Budget Speech presented before the Parliament by the Hon. Minister of Finance on Wednesday, 26th February, 2020, the Budget Estimates for the Fiscal Year 2020/2021 were thereafter referred to various Portfolio Committees for consideration in accordance with Standing Order No 95(1) (a), (c) and (d). This report is therefore based on ministerial performance for the 2019/2020 and scrutiny of 2020/2021 budget estimates.
The Portfolio Committee on the Social Cluster had several extensive meetings with the Ministries under its purview to discuss their submissions.
The Committee interacted with the following Ministries:
Health Education and Training Social Development Gender, Youth, Sports and Recreation
3.1 The 2019/2020 Budget Performance
The approved revenue target was M13, 470,366.00, but the Ministry has managed to collectM20, 956,659.00. This collection includes M11, 150,000.00 from Queen Mamohato Memorial Hospital (QMMH) which was budgeted for,
but omitted in the government system and Budget Estimates for the year 2019/2020.QMMH therefore brings the set target to the total amount of M24, 620,366.00 and the variance of M3, 66,706.45.00.The Ministry has set the revenue target without having clear statistics of its sources of collection which led to the failure to meet the target. The Ministry has collected less than the target in most of the budget line items. The Ministry has also collected M55, 363,570.00.00 from Medical Cannabis Licences and Pharmacies which was not budgeted for because the collection is deposited in the Post Bank.
3.1.2 Recurrent Budget
The Ministry’s approved funds amounted to M1, 961,091,988.00. The Ministry has utilized M1,836,495,154.57 of the total budget on financing various activities intended to enable the Ministry to carry out its day to day duties; Although the Ministry of Health has virements amounting to M2, 812,471.00 on Fuel and Lubricant vote, was unable to expend the amount released, hence the variance of M4, 637,449.72.00. The Ministry is hoping to use the budget balance of M47, 386,389.37on paying salaries, wages, allowances, and bills before the end of the 2019/2020 financial year.
3.1.3 Capital Budget
The total amount of M472, 391,771.00 was approved for the implementation of the various projects planned to ensure that the public obtain quality health services throughout the country. M5, 676, 967.00is already committed on the activities related to the Corona Virus under Southern Africa Tuberculosis and Health System project;
3.2 The 2020/2021 Budget Estimates
The Ministry has proposed revenue target of M29, 747,783.00 which has increased as compared to the approved target for the previous year. The Ministry hopes to meet the proposed target by increasing registration and licensing fees on the various sources of revenue collection.
3.2.2 Recurrent Budget
M2, 564,459, 211.00 budget has been proposed to finance different activities for the daily operations of the Ministry. The proposed budget has an increment of M603, 367, 223.00which was triggered by 210 Nurses who were employed during the previous year without having budget and are budgeted for this year.
3.2.3 Capital budget
The proposed budget for the projects amounts to M625,425,486.00 for the implementation of the activities related to the following projects: Support to Immunization, Construction of Maseru Hospital, Establishment of Cancer Treatment Centre, Support to TB Control Programme, NDSO Warehouse Construction, M.MAMA Emergency Transport System, Health Sector Reforms, Support TB Control Programme, Support to Laboratory Services, support to Reproductive Health, Southern Africa Tuberculosis and Health System Support, Lesotho Nutrition and Health Systems Strengthening.
Head- 03 Education and Training
3.3 The 2019/2020 Budget Performance
The Ministry’s approved budget for revenue collection was M6,113, 347.00 but the Ministry has collectedM2, 182,311.76which is less than the set target by M3, 931,035.24.00. Failure to meet the approved target was caused by the following to mention but a few: some parents have refused to pay tuition fee because of the teacher’s previous strike,sale of books has declined due to new curriculum. 3.3.2 Recurrent Budget The Ministry was allocated M2, 503,562,693.00 and the total spending of the budget was M2, 217,182, 900.44 which was utilised on activities planned to assist the Ministry in fulfilling its obligations; The variance will be spent on paying salaries, outstanding bills for fuel and lubricants before the end of the fiscal year 2019/2020.
3.3.3 Capital Budget
M172,727,631.00 was allocated for different projects in the ministry and M115,420,628.77was consumed on the activities related to the following projects: Free Primary Education, Construction of Secondary Schools, Basic Education Quality and Equity Improvement, Lesotho Basic Education Improvement.
3.4 The 2020/2021 Budget Estimates
The proposed revenue target has been reduced from M6, 113,347.00to M5, 278, 065.00 due to the removal of one source of revenue namely; interest other.
3.4.2 Recurrent Budget
The proposed budget has increased from M2, 503 566, 693.00 to M2, 616, 836,097.00.
3.4.3 Capital Budget
The Ministry’s proposed budget has increased from M172,727,631.00 to M229,880,118.00 for financing the different activities related to the following projects: Free Primary Education, Construction of Secondary Schools, Leribe TVET Institution, Improvement of secondary Schools, Eduaids, Improvement of Secondary Schools, Basic Education Quality and Equity Improvement, Basic Education Quality and Equity Improvement.
Head- 46 Social Development
3.5 The 2019/2020 Budget Performance
3.5.1 Recurrent Budget
The approved budget for the Ministry of Social Development was M259, 222, 498.00 which was increased by the supplementary budget of M5, 916,006.00 to cater for shortage of salaries. The Ministry has utilized M246,035,048.00 of the total budget on financing various activities intended to enable the Ministry to carry out its day to day duties; The Ministry’s budget was reduced on most votes and that led to under-budgeting on various votes. The Ministry therefore resorted to virements in order to implement its activities. The Ministry has consumed more than the approved budget on the expenditure of the following budget line items: Short Term Hire of Vehicles, Subsistence International, Food Fodder and Beverage, Power, Rent and Lease of Build for Government; The current budget balance was caused by the following amongst others: funds were released late by the Ministry of Finance, different suppliers delay to submit their
invoices and the ministries of Public Service and Public Service Commission delay to fill the vacant positions. There is unspent funds amounting to M13, 397,033.00which will be expended to pay salaries and outstanding bills before the 31st March, 2020; The performance is considered as fairly well taking into account the ministry’s spending.
3.5.2 Capital Budget
M30, 000, 000.00 was approved and earmarked for the Orphans and Vulnerable Children. M29, 539,634.00 of the approved money was utilized on funding National Information System of Social Assistance (NISSA) Data Collection in 46community councils and enrolment of 3998 additional households in Child Grant Program in 4 Community Councils. M130, 000,000.00was approved for the Social Assistance. M57, 000,000.00 was consumed on Child Grant coverage which has increased from 37,995 to 41,091.
3.6. The 2020/2021 Budget Estimates
3.6.1. Recurrent Budget
The proposed budget has increased from M259, 222, 498.00 to M290, 123,058.00 due to 80 positions which were filled during the year 2019/2020 but not budgeted for.
3.6.2 Capital Budget M120, 060,000.00 budget is proposed for the Orphans and Vulnerable Children project and Social Assistance project.
Head-43 Gender, Youth, Sports and Recreation
3.7 The2019/2020 Budget Performance
The Ministry’s approved revenue target was M144, 000.00 whilst the actual collection is M54, 525.00 with the Variance amounting to M89, 475.00. Revenue collection of this ministry was affected mostly by the few tenants who rented the buildings. Therefore, the amount collected depends on the number of tenants who occupy the place meaning it fluctuates.
3.7.2 Recurrent Budget
The approved budget for 2019/2020 Financial Year was M89, 614,412.00 while the total amount released was M69,837,117. 00, the expenditure is M64, 068,759.00 by the end of the year. The Ministry reported that the budget was not released timeously and it was cut against the approved amount budgeted for.
3.7.3 Capital Budget
The Ministry’s approved budget was M58, 366, 667.00 while the total amount released was M52, 772, 602.00.Tthe ministry managed to spend M52,160,377.31. There was a variation of M612, 224.69.
3.8 The 2020/2021Budget Estimates
The proposed budget for revenue collection under this ministry is M563 700.00 and as such it has increased from M144, 000.00 from the previous financial year.
3.8.2 Recurrent Budget
The proposed budget for 2020/2021 is M119, 896,717.00.
3.8.3 Capital Budget
The proposed allocation for the current Financial Year is M264, 183,447.00 which is going to finance mostly the sport infrastructure, logistical and hosting costs for 2020 African Union Sports Council (AUSC) Region 5 games.
- The 2020/2021 Proposed Budget for COVID – 19
The world is faced with a pandemic of COVID-19 that is killing masses in different countries. There are very few countries that have not reported cases of COVID-19 and Lesotho is among them. To prepare for the prevention and spread of this disease should Lesotho have reported cases, the Right Hon. Prime Minister announced that Cabinet has set aside an amount to the tune of M698,000,000.00. To come up with this amount, the Budget Office, from the Ministry of Finance was asked to find ways of accumulating this amount and the Budget Office was instructed to cut 22% of the proposed budget from each capital or development project from the Government Ministries that have capital budget.
During interviews with the Ministries falling under the purview of the Portfolio Committee on the Social Cluster, it was discovered that all the Ministries, except the Ministry of Social Development were not consulted to have inputs and to state the impacts should these cuts affect certain programmes and projects. Ministry of Social Development was given additional funding. The Ministries were given a chance by the Committee to make their own proposals, but bearing in mind that M698,000,000.00 was needed to fight COVID-19. Below is the summary of their proposals:
4.1 The Ministry of Health
Under the Support to TB Control Programme the Ministry has made a commitment to provide funds to the TB and HIV programmes for the sustainability of the project. It seems that the Ministry will be unable to meet its commitment as anticipated by the
Development Partners due to the proposed budget cut for COVID – 19 amounting to M520, 952.00. The project is very crucial for the country because it focuses on reducing TB infections and HIV infections which are the major health problems in the country, thus it will not be appropriate to reduce its budget. The Ministry therefore proposed that the required budget be deducted from the Construction of Cancer Treatment Centre. Support to Immunisation project is very important as deals with prevention of certain diseases through immunization and therefore is vital that all children are injected in order to prevent certain diseases outbreak. Based on the significance of the project, The Ministry proposed that the budget of M1, 342,383.00 for COVID – 19 be cut from the Construction of Cancer Treatment Centre to enable the Ministry to fulfill its obligations. Having realized the spread of COVID – 19 globally and the necessity for the Country to have the budget for the deadly disease, the Ministry has accepted the Cabinet resolution that the budget amounting to M10,711,729.00 for financing COVID – 19 plans be deducted from the Construction of Maseru District Hospital. The Ministry, however will not be in a position to finance activities required for the project to take-off such as building of temporary residents for the construction company, hoarding, building permit, connection of electricity and water due to the proposed budget reduction. Consequently, the Ministry has proposed that the budget cut be provided during the reallocation period. Taking into consideration that the designs and regulatory body for the project are not yet ready and the Ministry will establish a Chemo-therapy Centre at Sankatane to cater for cancer patients, the Ministry agreed with the Cabinet resolution that the budget for the Construction of Cancer Treatment Centre be reduced by M8, 580,639.00 for the COVID – 19 budget.
The Construction of NDSO Warehouse is 90% completed and the Ministry therefore accepted that the proposed budget of M59, 872, 282.00 for Corona Virus be deducted from the project. Nevertheless, the Ministry will need an additional budget of M11, 000,000.00 for the finalization of the Construction of NDSO Warehouse and proposed that the required budget be deducted from the Construction of Cancer Treatment Centre. The Ministry agreed with the Cabinet resolution that budget of M39, 900.00 for COVID- 19be cut from M-Mama Lesotho- An Emergency Transportation System because the project is new and has donor funding.
4.2 Ministry of Gender, Youth, Sports and Recreation
The Ministry indicated that it was not possible to make any cuts from their recurrent budget. Therefore, they concur with the cuts proposed by the Budget office. However, they indicated the following consequences: Gender Advocacy- (M814,668- M171,080=M643,588) With the reduction made to their proposed budget, it would not be easy to fight the growing domestic violence of spouses being forced to stay indoors by lockdowns, increased sexual offences perpetrated by people staying at home (not going to work). In short, Gender Based Violence is likely to be a serious problem. Construction of Leribe Sports Complex (M10,000,000-M2,100,009=M7,899,991) The Ministry agreed that the budget should be passed as proposed as the construction is not ready to start. Vocational Training Centers (M15,000,000-M3,149,993=M11,850,007) The Ministry indicated that it would not be possible to construct warehouses for the items that were donated to Lesotho by India. Common Wealth Games Sports Center (M213,807,506- M44,899,574=M11,850,007)
The Ministry indicated that they will not be able to construct all the planned facilities, but will construct some facilities that could be accommodated in the new budget.
4.3 Ministry of Education and Training
Construction of Secondary Schools (M20,400,000-M4,283,998=M16,116,002) The Chief Accounting Officer indicated that it was not possible to find any money from other sources such as the Recurrent Budget, but to agree with the proposed cut by the Budget office on this project. However, they have decided to maintain the same number of schools to be constructed, but forego the building of nine (9) laboratories in nine different schools. Establishment of TVET Institution in Leribe (M100,000-M21,003=M78,997) The Ministry indicated that it would not be possible to make a cut on this project because the work was already done by the contractor and the proposed M 100,000.00 would be used to settle the balance owed to the Contractor. Basic Education and Quality Improvement (M400,000-M84,000=M316,000) The Ministry agreed with the proposed cut. Improvement of Secondary Schools (M38,650,000-8,116,504=M30,533,496) The Ministry suggested that a great cut could be made in this project as they have already made a significant progress. They are willing to contribute extra M74,682.00 so that a cut should not be made under the counterpart contribution. Improvement of Secondary Schools (Counterpart) (M255,638- M53,678=M201,960) The Ministry does not agree with the proposed cut because they have a commitment to the Development Partners. Failure to contribute this amount would not allow the Ministry to access funds from the Development Partners. Therefore, she suggested that more funds could be drawn from the other project as stated above.
- General Observations and Recommendations of the Committee
5.1 Observations of the Committee
Despite the increment of the proposed budget, there is a shortage of salaries amounting to M2, 663,000.00 for the Ministry of Social Development thus the proposed budget will not sustain the Ministry. In Thaba-Tseka, disabled and chronically ill persons have not yet received Public Assistance in cash due to the current system (EPICOR 10) technical problems. This adversely affects their lifeand renders the Ministry ineffective and inefficient in terms of service delivery. Some Old age people in some districts are not receiving social protection funds because they are unable to walk and therefore they could not afford to register at the Ministry of Social Development. As a result, they are living in an abyss of abject poverty. Various departments within the Ministry of Social Development work in silos in the preparation of the Budget Framework Papers which results in difficulties in the budget spending. The proposed budget for the Ministry of Education has a shortfall of M25, 942,040.00 which will adversely affect the implementation of their planned activities and utilization of budget for the year 2020/2021. The Ministry of Finance released funds for government ministries on monthly basis during the last quarter of the previous year which has a negative impact on their service delivery. Budget for the Ministry of Health is not enough for the country’s preparation forCOVID- 19 that seems to be spreading with an alarming rate and affecting various countries worldwide including Republic of South Africa;
The Ministry of Health was authorized to employ 210 Nurses during the fiscal year 2019/2020 by the Ministry of Public Service but the Ministry Finance could not provide funds for their salaries thus, the Ministry has a shortfall on salaries for these employees in the previous year; The Ministry of Health made over M90, 000,000.00 payment in vouchers to the Ministry of Finance to effect the payments in the previous year but at the end of the year, the Ministry of Finance returned them indicating that there were no funds. The Ministry of Health will therefore be compelled to pay the outstanding bills in the year 2020/2021.This will negatively affect the spending of the Ministry. There are some staff members within the Ministry of Health who sell Patient Booklets illegally for their benefits, hence the revenue collection was badly affected. There was no transparency on the utilization of the budget on the Support to Immunization project funded by GAVI and the Ministry of Health failed to account and convince the Development Partner on the expenditure of funds and therefore the Ministry had to reallocate M2, 000,000.00 from the project to reimburse the Development Partner yet there is a shortfall of infants injections. The reduction of budget leads to making of virements by government ministries in order to implement their activities which reflect poor budgeting. For instance, the Ministry of Health had a huge amount of virement amounting to M 30,601,890.94 The Ministry isGender is beset with a challenge of huge debt of Water Supply. Therefore this is going to have detrimental effects on the operations of the Water and Sewage Company (WASCO) because it will finally face problems of cash-flow if governments’ ministries are not assisted and encouraged to pay WASCO and other sister companies like Lesotho Electricity Company (LEC) timeously. The Ministry of Gender has been allocated money for the implementation of the Leribe Sports Complex for many years but there is no progress made to date.
5.2 Recommendations of the Committee
Government Ministries’ performance is affected by the challenges of the current (EPICOR 10) system, hence, the system ought to be revised; The Committee recommends that the Ministry of Finance should play a pivotal role in assisting the Ministry of Gender, Sport and Recreation with adequate financial resources in the best interest of the country to host 2020 African Union Sports Council (AUSIC) successfully because success of this activity will promote the image of Lesotho internationally The Ministry of Gender is in dire need of office furniture because of the current dilapidated office furniture. The Committee recommends that government through the Ministry of Finance should find ways to address this problem as a matter of urgency. The issue of assisting graduates with internship programs should be the prerogative of the Ministry of Gender, Youth, Sports and Recreation only. The Committee recommends that the Ministry of Finance should do all that is within its power to release funds on time to different government ministries and departments because delay in releasing funds has a negative impact on the different operations of several ministries. For instance, the Ministry of Gender and Youth, Sport and Recreation paid physical experts in arrears who are here to help Lesotho’s sport and recreation. This Ministry of Gender and Youth, Sports and Recreation is concerned with duplication of efforts, because it is dealing with issues of abuse and gender equality concurrently with the Ministry of Social Development. Therefore, the Committee recommends that issues of abuse and gender equality should be dealt with solely by the relevant ministry which is Ministry of Gender and Youth, Sports and Recreation. The Committee recommends that the Technocrats from the Ministry of Health should be part of the delegates at the Command Centre and lead the Health Sector on issues
related to Health because it will be dealing with COVID-19 Patients directly should Lesotho have reported cases. The new proposed budget amounting to M7,899,991.00 for the Construction of Leribe Sports Complex be cut and reallocated to Gender Advocacy and Common Wealth Games Sports Centre projects because the Ministry is not prepared to implement the Construction of Leribe Sports Complex any time soon though the Ministry has been allocated budget for this project for the past three consecutive years but there is no significant progress made to-date.