The KwaZulu-Natal province overspent its budget by R2.5-billion in the 2008/09 financial year, audited expenditure results revealed on Thursday.

Finance MEC Ina Cronje said several factors explained the over-expenditure particularly the implementation of the occupation specific dispensation (OSD) in the departments of health and education.

"There have always been budgetary shortfalls associated with OSD not only in KwaZulu-Natal, but in most provinces," she said while releasing the expenditure outcome for that year.

"The increases in the number of patients receiving antiretroviral treatment in the department of health as well as the general increases in medical inflation have also put pressure on the health budget."

Construction and fuel costs had also increased significantly over the year resulting in infrastructure departments over-spending, she said.

While explaining the over-expenditure, Cronje said the province also over-collected its budgeted own-revenue by R106.6 million in the same year.

"This (the over-collection) is very positive, as it indicates an improvement in revenue collection measures by provincial departments," Cronje said in a statement.

"Several departments contributed to this over-collection... the department of transport, education, the premier's office, health and agriculture."

The over-collection could be attributed to a number of things including the increase in the number of companies paying their outstanding licence fees and a large number of drivers' licence renewals.

The MEC said the 2008/09 financial year also saw an increase in the gaming and casino industry which resulted in over-collections on casino taxes.

The rapid processing of medical aid claims led to the health department strengthening its health patient fee collection.

Meanwhile, expenditure on conditional grants was almost on target at 97.3 percent compared to 93.8 percent in the previous financial year.

Sapa

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