8 February 2010
This paper was prepared in response to a request from the Open Democracy Advice Centre (ODAC) who wishes to develop an “Open Democracy Charter”.[1] It is hoped that this paper will contribute towards the discussion of best practices so as to develop a way forward on forging a truly open and transparent democratic South Africa.
Access to Information as a tool in combating corruption in South Africa’s public sector.
Jay Kruuse
Public Service Accountability Monitor (PSAM)
Centre for Social Accountability (CSA)
Rhodes University
Email:
The consequences of corruption are best explained in the words of Justice Arthur Chaskalson:
“Corruption and maladministration are inconsistent with the rule of law and the fundamental values of our Constitution. They undermine the constitutional commitment to human dignity, the achievement of equality and the advancement of human rights and freedoms. They are the antithesis of the open, accountable, democratic government required by the Constitution. If allowed to go unchecked and unpunished they will pose a serious threat to our democratic State.”[2]
In September 1996 prior to the introduction of the Promotion of Access to Information Act 2 of 2000 (the Act) the Constitutional Court indicated that the entrenchment of an access to information right in the Constitution of the Republic of South Africa, 1996 (the Constitution) was “directed at promoting good government”.[3] This was affirmed when the Act came into operation on 9 March 2001[4], with its preamble noting that its intention was to “foster a culture of transparency and accountability in public …. Bodies” while section 9 of the Act explained its objects in very similar words.[5]
Further authority can be found in Chapter 10 of the Constitution which provides a range of democratic values and principles governing the public administration which are aimed at promoting good governance, including that:
(a) A high standard of professional ethics must be promoted and maintained.
(b) Efficient, economic and effective use of resources must be promoted.
(c) ….
(d) Services must be provided impartially, fairly, equitably and without bias.
(e) People’s needs must be responded to, and the public must be encouraged to participate in policy making.
(f) Public administration must be accountable.
(g) Transparency must be fostered by providing the public with timely, accessible and accurate information.
The introduction of subordinate legislation[6] has sought to bolster good governance and address the prevalence of corruption in South Africa. However the difficulty with combating public sector corruption is that it almost always involves people who have access to information which is outside the public domain, and who hold positions of influence and trust over significant public resources.[7] Fortunately the Promotion of Access to Information Act provides a mechanism to combat corruption provided it is used and implemented properly.[8] This paper is written from the perspective of the Public Service Accountability Monitor (PSAM)[9] which is based at Rhodes University. The PSAM’s objectives include:
- To monitor the effective implementation of social accountability processes, provide an analysis of issues affecting the efficient delivery of public services, and conduct high profile public advocacy using these findings for purposes of holding public officials and private service providers to account for their performance in managing public resources and in realising human rights.
- To draw public attention to cases involving the misuse and/or abuse of public resources, and promote the initiation of corrective action and the establishment of effective public integrity processes for purposes of improving the effective management of public resources and the realization of human rights.
- To strengthen citizen and parliamentary oversight of the management of public resources in order to promote the delivery of public services by government departments and private service providers.
- To litigate in pursuance of the objectives of the CSA, when such action is deemed necessary.[10]
Since the introduction of the Act, the PSAM has actively used its provisions to try and further its vision of institutionalising social accountability. In this paper I will consider two PSAM case studies which will illustrate where the Act can be used to combat corruption and advance good governance and accountability, especially where government itself displays an unwillingness to take action against those it employs and does business with. Unfortunately, both case studies will also show that using the Act can only assist to a certain extent - where leadership remains weak, ulterior motives can erode attempts to advance accountable governance.
Barometers and sources of good or bad governance
Before setting out these case studies it is best to consider the following sources of information which may assist in identifying underperformance, maladministration and corruption within the public sector:
- Reports and investigations undertaken by various Chapter 9 institutions established by the Constitution, which include the Auditor-General, the Public Protector and the South African Human Rights Commission. [11]
- Reports and investigations undertaken by the Public Service Commission established in terms of section 196 of the Constitution.[12]
- Reports and investigations initiated by government departments and public entities, either undertaken internally or outsourced to private sector audit and/or legal firms.
- Commission’s of Inquiry.[13]
- Testimony and records placed before parliamentary oversight committees.
- Whistleblowers from within and outside of government.
- Investigative articles prepared by the media and civil society.
- Testimony and court records in both civil and criminal matters.
- Testimony and records placed before parliamentary committees.
One of the most coherent barometers to assess the health of governance within the public sector is provided by the Auditor-General of South Africa (the AG) who is required by law to annually audit government departments and entities and to then report on its findings to the various Legislatures.[14] The AG’s reports must express an opinion on the financial statements of the department or entity audited.[15] The audit opinion expressed can be categorised, for instance an “unqualified opinion” is expressed where the financial statements are presented fairly in all material respects in accordance with the applicable financial reporting framework.[16] An “adverse audit opinion” is expressed “when the effect of a disagreement with management regarding departures from the financial reporting framework/basis of accounting is so material and pervasive to the financial statements that the auditor concludes that a qualification of the report is not adequate to disclose the misleading or incomplete nature of the financial statements.”[17] The AG expresses a disclaimer of opinion when “the possible effect of a limitation is so material and pervasive that the auditor has not been able to obtain sufficient appropriate audit evidence to form an opinion and accordingly is unable to express an opinion on the financial statements”.[18]
Legislatures are required to consider the AG reports and should call upon public officials and political heads to account meaningfully and take the requisite action to improve governance by addressing systemic weaknesses so that public services are improved, resources are used efficiently, economically and effectively and private interests not favoured.[19]
While this paper does not explore issues surrounding weak political leadership[20] which may result in underperformance, maladministration and corrupt practices not being adequately addressed, the following remarks contained in the Report of the Independent Panel Assessment of Parliament[21] reveal some of the challenges faced by legislature oversight committees in the light of such leadership issues:
“In hearings with the chairpersons of Parliamentary committees the Panel was struck by the frankness with which some committee chairperson admitted to their lack of influence over the Executive. The following quote from a senior Member of Parliament is illustrative: `“I think when we look at the issue of the relationship between committees and the Executive; it’s essentially a matter of power. We should not complicate this matter; it’s about power and whose views prevail. According to my experience…it tends to be the view of the Executive that prevails. For instance, when I came to Parliament I served in one committee for six years. I left it because I was sick and tired of wasting my time because the minister won’t listen”.’ Another long serving committee chairperson said, in speaking of the power relationship between Parliamentary committees and the Executive, `“we do not have power…we are not taken seriously”’. These views are concerning to the Panel, as the effectiveness of oversight is intricately linked to the independence and robustness of Parliament.”[22]
According to an in-depth study of six countries undertaken by Shah and Schacter[23], the following factors were found to be key drivers of corruption: contested legitimacy of the state as the guardian of the public interest; weakly embedded rule of law; ineffective institutions of accountability; and weak commitment of leaders to combating corruption.
On the whole, government’s audit performance in South Africa has and continues to be cause for concern with only marginal year-on-year improvements in some departments and entities, while other departments audit track record have regressed over the last decade. On 25 January
2010 the Auditor-General (AG) appeared before National Parliament’s Standing Committee of Public Accounts (SCOPA) in order to brief it on the Audit Outcomes for 2008/09 for National Departments and Entities. The briefing included a comparison against audit performance in 2004/05. Whilst national departments who had received audit opinions of “financially unqualified (with other matters)” had been reduced from 24 Departments in 2004/05 to 15 in 2008/09, the same could not be said for national departments who had received “qualified opinions” (i.e. a worse opinion) in that they had increased from 6 departments in 2004/05 to 12 in 2008/09. During the AG’s presentation three key internal control elements were identified as drivers to improve audit outcomes: leadership, financial management, and governance.[24]
At the provincial level of government, vital service delivery departments such as Health, Education and Housing which receive the bulk of provincial funding continue to display very poor audit track records. When the AG issues an adverse audit opinion or a disclaimer of opinion it should raise alarm bells. Such opinions will often highlight serious financial management failings enabling maladministration to occur from unauthorised expenditure to more serious forms of misconduct and corruption. They are often indicative of major service delivery failings and represent compelling evidence of where the state has not made proper use of its resources so as to advance access to human rights, let alone their progressive realisation as required by our Constitution.
The Eastern Cape Department of Education has for instance received 12 consecutive audit disclaimers since 1995 followed by three adverse audit opinions in 2006/07, 2007/08 and 2008/09.[25] Similarly the Eastern Cape Health Department has received 9 audit disclaimers and three adverse audit opinions in the past 13 years.[26] A perusal of the AG’s reports supporting these audit opinions reveals findings and evidence-based conclusions requiring corrective steps to be taken, including the initiation of disciplinary action against accounting officers implicated in recurrent acts of non-compliance with the provisions of the Public Finance Management Act (PFMA). Despite these findings, MEC’s[27] and various Premier’s of Eastern Cape Province have displayed an unwillingness and/or inability to commence with disciplinary action, particularly against senior officials.
This unacceptable state of affairs prompted the Eastern Cape Provincial Legislature’s SCOPA to recommend in its Consolidated Report for 2006/07 that the accounting officers for the departments of Health, Education, Social Development, Economic Affairs and Tourism and Provincial Treasury be charged with financial misconduct and that disciplinary proceedings be instituted in terms of section 84 of the PFMA.[28] Despite these findings no disciplinary action has been taken by the political bosses against the accounting officers concerned, with only certain officials contracts not being renewed when they expired.
Case Study 1: Housing subsidy fraud committed by public servants
On 10 August 2006 the Chief Financial Officer (CFO) of the Eastern Cape Department of Housing, Local Government and Traditional Affairs gave testimony before the Commission of Inquiry into the Finances of the Provincial Administration.[29] The Public Service Accountability Monitor (PSAM) attended these hearings and obtained copies of documentary evidence submitted to the Commission alongside the official transcripts of hearings. During the CFO’s testimony it was explained that 1180 public officials were being investigated for having allegedly obtained housing subsidies from the provincial department through fraudulent means.[30] Whilst 583 of these cases had been forwarded to the South African Police Service for criminal investigations to commence, testimony revealed that little or no internal disciplinary action had been taken against officials implicated.
In August 2007 the PSAM requested various records from the information officer of the Housing Department using the Promotion of Access to Information Act.[31] The Department’s information officer did not respond to the request so the PSAM lodged an internal appeal[32] with the MEC (identified as the “relevant authority” for purposes of an internal appeal[33]) given the deemed refusal of the PSAM’s request.[34] The MEC failed to respond to the request within the timeframes prescribed by that Act.
The PSAM accordingly issued proceedings in the High Court, requesting the following:
a) All reports, memoranda, correspondence, schedules and/or other documents pertaining to criminal investigations in regard to the 583 cases of government housing subsidies allegedly awarded to provincial government officials through fraudulent means;
b) All reports, memoranda, correspondence, schedules and or other documents pertaining to departmental investigations instituted and/or conducted and/or disciplinary proceedings taken against the 583 provincial government officials who have allegedly obtained housing subsidies from the department by fraudulent means.
c) All reports submitted by the head of department to the MEC, the Department of Public Service and Administration and the Public Service Commission on the outcome of disciplinary proceedings referred to above.
d) The schedule submitted by the head of department to the Provincial Treasury, the National Treasury and the Auditor-General regarding investigations instituted and/or conducted and/or disciplinary proceedings taken against the 583 government officials who had allegedly obtained housing subsidies from the department by fraudulent means.
The Department did not oppose the matter when it was heard on 21 February 2008 where an order with costs was obtained in favour of the PSAM. The court order directed that the Department release the documents listed at paragraphs (a) to (c) immediately above, alongside a range of other documents requested. The Department subsequently complied substantially with the court order by releasing documents which showed that: