The Department of Tourism returned R201 million to Treasury after failing to spend it.
This includes the R120.5 million earmarked for destination development and job-creation projects.
The department spent only 91.7% of its R2.435 billion budget in the 2025-26 financial year, with officials admitting to Parliament that the underspending was a serious failure.
The admission comes as the department continues to argue for more money for tourism while failing to spend the money already allocated to it.
Dr Shamilla Chettiar, the department’s deputy director-general for destination development, told Parliament’s Portfolio Committee on Tourism on Tuesday that the failure had directly affected work opportunities.
“We see this as something that is a very serious matter because of the impact of that underspend on work opportunities,” she said.
Chettiar said the department had introduced measures “to ensure that we never repeat this situation ever again”.
She added: “It is deeply regrettable from our side.”
About R30 million of the R120.5 million underspend was intended for infrastructure and was “largely projected spend for the Platfontein project in the Northern Cape”.
“We had anticipated initially that construction at the Platfontein site would commence in January 2026,” she said.
Chettiar said the department could not simply carry the unspent money into the new financial year.
“You would have to make a rollover request to Treasury for these funds, but rollovers were not possible,” she said.
“In the last financial year, we have had to return that funding to Treasury.”
The failure immediately came under fire from MPs.
DA MP Haseena Ismail questioned why the department had returned the money instead of seeking to preserve funding for job-creation programmes.
“There is no rollover requested for the R201 million underspent. Why return R201 million to Treasury instead of rolling over for Working for Tourism, EPWP jobs for youth, women and the disabled?” Ismail asked.
She warned that the failure had consequences beyond an accounting line in the department’s books.
She said she was worried about the impact on jobs and attacked what she described as a recurring pattern of explanations from the department.
“Every time we come to a BRRR, we get the same excuses over and over again. And it’s time this must stop,” she said.
She also questioned how the department could justify asking for a bigger budget when it was unable to spend the money it already received.
“How do we actually ask for this when we are underspending?”
DA MP Elmarie Linde pointed out that the problem had worsened dramatically.
“Department underspending has increased from R128.8 million in 2024-25 to R201 million in 2025-26,” she said.
The department’s own 2024-25 annual report recorded the R128.8 million underspend.
It attributed that underspending to too few active projects, funds that Public Works would not approve because job targets had not been met, and invoices that could not be processed.
The department also committed to reviewing its Working for Tourism programme.
But the explanations offered to Parliament on Tuesday suggested that the problems had continued.
Director-general Nkhumeleni Victor Vele said partnership negotiations had collapsed, new approval processes had slowed projects and some tenders had to be restarted.
“When some of those negotiations collapse, we have to revert back to the old way of procuring services,” he said.
“The time that would have been lost cannot be regained.”
Vele also said officials were increasingly reluctant to sit on procurement committees.
“There’s a lot more reluctance to serve on committees that have anything to do with procurement,” he said.
The consequences are particularly stark in the department’s infrastructure programme.
Platfontein Lodge near Kimberley remains under construction and is one of three tourism projects still being built this year, alongside Manyane Lodge in North West and Muzi Pan in KwaZulu-Natal.
A departmental briefing in 2022 had indicated that construction at Platfontein was expected to begin in early 2023.
The department has now returned money that was intended, among other things, to fund infrastructure at the site.
The committee also wanted to know how many jobs had been lost because of the underspending.
The department did not provide a figure in its replies.
Chettiar said the department had since intensified monitoring and was holding weekly meetings on its EPWP projects, including their delivery and expenditure.
The department received a clean audit from the Auditor-General and reported that it achieved 92.54% of its targets.
It also says it achieved its EPWP jobs target.
But MPs were clearly unimpressed by the contradiction between the department’s reported performance and the growing underspending.
The committee warned that returning hundreds of millions of rand to Treasury cannot simply be treated as an administrative problem when the money was intended to fund tourism projects and create work opportunities.
Its chairperson said the department’s explanation was unacceptable.
“The poor expenditure on the EPWP projects and the reasons given are not acceptable.”
The chairperson said the committee had raised the same problems before, including during oversight visits.
“The department was tone deaf to the committee’s observations and recommendations. This should stop,” she said.
She also warned that underspending “must be avoided at all costs”.
The department has been asked to explain whether it sought a rollover of the R201 million, what impact the underspending had on jobs and why money earmarked for job-creation and infrastructure was ultimately returned to Treasury.
