By Reacting to the Auditor-General’s report, the Democratic Alliance (DA) in the Free State Province has expressed concerning about the province’s ability to generate its own incoming following disheartening revelations in the report.
In her Consolidated Annual General Report on National and Provincial Audit Outcomes 2023-24, the Auditor General said though the Free State has made some positive improvements, infrastructure still remains a worrying concern and called on the current administration to address infrastructure challenges in the province by capacitating project management units with appropriately skilled officials and implementing monitoring and reporting mechanisms for infrastructure issues.
Infrastructure and state owned entities are essential to the province’s economic growth and prosperity; to this, the DA in the province reacted to the AG’s report saying the declining ability of the Free State to generate its own revenue is a growing concern, compounded by the financial mismanagement of entities like the Free State Development Corporation (FDC) and the Free State Gambling, Liquor and Tourism Authority (FSGLTA), which continue to burden the provincial fiscus.
According to Dulandi Leech, the Spokesperson of Finance in the Free State Legislature for the DA; the Auditor General (AG) Report, for the 2023/24 financial year, the FDC saw a 9% decrease in its assets while it’s total liabilities increased by 9%. The AG report also reveals that the Gambling, Liquor and Tourism Authority faces similar challenges in terms of decreased assets and increased liabilities.
“The Development Corporation should be at the centre of economic stimulation in the province and operate as a self-sustaining corporation that generates revenue but is a liability instead.
For the 2023/24 period, the Development Corporation reported a net deficit of R9.8 million, raising concerns about its ability meet its financial obligations,” said Leech.
Leech has attributed the failure in performance to generate income to corruption and mismanagement in the entities.
“Due to corruption and a management crisis, the Gambling, Liquor & Tourism Authority has failed to fulfil its mandate, which is why we see so many liquor establishments across the province that were awarded licenses under questionable circumstances and why, in spite of hundreds of millions of investments, facilities like the Phakisa Motor Circuit in Welkom remains a white elephant.
The province has significant untapped potential to generate more revenue, especially in tourism sectors,” said Dulandi Leech.
“The most recent financial report indicates that during the past financial year, The Free State did not receive any revenue directly from tourism. Provincial resorts and reserves should bring in money instead of costing money. The Philip Saunders resort, for example, has cost the province R160 million and still fails to bring in revenue.
Own revenue can significantly relieve an already overburdened fiscus, but not without a government structured toward delivery rather than expensive and failing entities,” she concluded.
