KZN Education Department's financial crisis deepens as funds run low

The financial crisis in the Department of Education continues to deepen, with the department revealing that the situation has become so dire that it could not afford to clean its own toilets.

The poor working conditions in the department’s offices have caused staff to either be unwilling to come to the office or to leave at midday.

The department expects to run out of money next month and is already spending the budget for the next financial year. Officials have stated that the only solution going forward would be for the department to receive a major cash injection.

Department officials briefed the members of the Education Portfolio Committee this week, laying out the crises that have resulted from the budget cuts. Committee members said it was clear the department is on the brink of a catastrophe.

It was revealed that there are close to 9,000 posts that cannot be filled, and the department is expected to lose another R11 billion in the next two years due to the budget cuts. The Chief Financial Officer (CFO) of the department, Yali Joyi, described the situation as “critical.”

“If we count from the previous years, you can see that we have been cut by R6 billion a year, R3 billion in other years, and all of this has totalled R26 billion. So, it has been slowly impacting operations because it means if you don't fund the wage agreement, where are you then going to get the money because the posts are filled?

“What has happened is that it has impacted operations such that we have taken from the operations funding and funded the national wage agreements and pay progression agreements. With each year, nothing changes. If you look at the outer years, they are still projecting to cut more funds.

“They still project R5.6 billion for 2026-27 and R5.6 billion for 2027-28. This replica is carried over in all financial years. This has caused delays in payments; we are not meeting payment obligations in terms of paying service providers on time and paying our other obligations. No one has come back to look at the impact of those budget cuts,” she said.

Joyi said the standard cuts that were implemented across the board have not worked and have caused unauthorised expenditure of R1.5 billion. She said they have tried to curb expenditure by cutting new orders. “The national treasury said no new orders must be taken, but that has not worked. The department has to meet its obligations in terms of the constitution, and the only viable solution would be a cash injection.

“You can look at stopping the issuing of orders; the only issuing of orders we have done was in July, and it was for cleaning because the state of the toilets was unbearable. The dustbins and everything were in a terrible state. The Treasury allowed that only in July because officials could not even come to the office, and those that came left at midday.

“Unless we resolve the issue of that baseline, it will always continue like this,” she continued.

The department said it could run out of funds as early as October. “We are in September; if you look at cash flow in the presentation that we have made, you can see the amount that is left in the department.

“You (members) are correct in saying the department will have no funds; in fact, from October, after making some payments, we won’t have any funds. So for as long as the cash injection is not provided, we will continue to operate in the manner that we are operating,” she added.

DA committee member Dr Imran Keeka said, “What you (CFO) are telling us, based on your (presentation), is that the department is financially kaput.” “The CFO said there is a need for a cash injection, but the question is, from where? The province does not have it; it gets an allocation, and that is it. You have to look internally; you have to look at navel gazing, which is a very unpopular part, the review of contracts, etc. Right now, we are hearing from you how bad it is, and that does not sound good,” said Keeka.

Another committee member stated, “Our department seems to be in the middle of a catastrophe; it’s facing disaster because of the budget cuts. We are already facing the impact of large classes with fewer teachers because we cannot hire teachers; it could soon affect the availability of school materials,” said the member.

An official from the provincial treasury told the committee it does not have money to bail out the department.

THE MERCURY