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Polity
Published: 27 Jul 2012
ANC: Statement by Dr Mathole Motshekga, African National Congress Chief Whip, contextualises local government challenges (27/07/2012)

This year marks our eighteenth year of democracy. It is also the year in which we celebrate the 100th year of the African National Congress. I single out these two important milestones in our history because our ‘long walk to freedom’ may have brought us democracy, with a fundamental role played by one of the oldest liberation movements on the continent, but our freedom comes burdened with centuries of baggage of inequality, separate development coupled with legalized racial discrimination and a legacy of gross human rights targeted at the majority of South Africans. Too often we have heard the regular whine from critics and certain sections of the former and still privileged group that eighteen years is ample time to have undone the products of apartheid which was labeled at the time “a crime against humanity”! This beggars belief.

The recent release of the Auditor-General’s 2010-2011 general report on local government audit outcomes has revealed and laid bare serious problems with regard to municipal finance and intergovernmental fiscal issues. Of the municipalities audited under “Operation Clean Audit”, only 5% received clean audit opinions, with the rest receiving material findings on their service delivery reporting and/or non-compliance with laws and regulations. “Operation Clean Audit” was launched by President Zuma’s administration in 2009 to address the poor audit outcomes of local government. If we are to delve into and examine the transformation efforts which the country has embarked upon since 1994, particularly regarding corporate governance, we should be honest to admit that “the patchwork of sub-national government structures developed under apartheid which has been consolidated into nine provincial governments, six metropolitan districts, and 283 municipalities, cannot on its own overcome the damaging institutional legacies of the apartheid era. We must acknowledge that “with the focus on the complexities of organizational restructuring, there was insufficient policy focus on addressing these deeper institutional legacies, particularly in the former homelands.”Prior to 1994, much of the state funding processes were cloaked in secrecy. In the dying years of apartheid, and as the liberation movements gained leverage, more state control over the economy resulted in massive military and security spending, often with regard to projects to eliminate liberation movements and crush state opposition. Most, if not all of these were funded by the tax-payer. In addition, the role of the Auditor-General was not transparent but was immersed in questionable and suspect acts. The dawn of democracy, shone a spotlight on just how ill-prepared and blind-sided the democratic government was to rectify the mal-administration and various clandestine fiscal issues of the apartheid state. Full disclosure was not forthcoming but to its credit, the ANC-led government believed that the administration of public finances was a priority and set about improving control measures.

In her book “Public Sector Reform- Governance in South Africa (2005),Karen Miller states that the democratic political dispensation of post-apartheid South Africa, inherited a public service which was beset with problems. The impact of apartheid created a public service that lacked legitimacy, professionalism, representation, a democratic and development culture and the capacity to deliver quality services to all South Africans.” 1 The ANC-led government proceeded to establish the legislative regulatory framework governing the public sector management and administration environment. Key areas which focused on this are the following: the South African Constitution in relation to public sector financial management; the regulations governing division of revenue; the South African legal system within theadministration context; the legislative regulations and legal principles to contracts and the implementation of the Municipal Finance Management Act, 2003 in a municipality. All of these measures sought to ensure professionalism, a high level of ethics, good governance practices,accountability, transparency and integrity within the public service and especially in public servants. And yet, despite ongoing and improved measures to advance governmental fiscal discipline viz Treasury regulations, the Public Finance Management Act, 1999 (P.F.M.A.) and the Public Audit Act, 2004, we are still beset by reports of mal-administration, corruption and poor auditoutcomes.

We acknowledged these challenges in our National Planning Diagnostic Overview thusly:“17 years after the end of apartheid, the public sector remains chronically unstable…“much of local government” was “in distress”, noting that urban municipalities tend to perform better than those in rural areas and especially those located in the former homelands.Provincial and local governments are therefore least able to delive services in the poorest and historically most marginalised areas where those services are most needed. This high level of variation in service quality leads to a strong sense of injustice in society.”2 We must also acknowledge, as we did at our recent National Policy Conference that there are significant differences in the human,financial and other resources available to provinces and municipalities.It is imperative that we improve state capacity to implement economic policy.

Contained in our “Second Phase of Transition” policy document,we have outlined the necessity to ensure strong and coordinated economic development capacity in government, so that the different aspects of our economic policy (fiscal,monetary, industrial, etc) speak to each other. In addition, we must add the important role of Parliament and the legislatures, as well as our Chapter 9 institutions and local government, to facilitate peoples’ participation, to monitor progress and play oversight role.3 Despite the doom and gloom forecasts proffered by our critics, it is the ANC which has ensured the strengthening of Chapter Nine institutions such as the Auditor-General’s Office, ensuring that it is supported in its initiatives to assist auditees to achieve the clean audit goal. We are also encouraged by the Auditor-General’s pronouncements that those municipalities who have achieved clean audits in Kwa-Zulu Natal,Limpopo, Mpumalanga and Western Cape, did so largely because “What these provinces are beginning to display is the outcome of concerted efforts on the part of political leaders and management. They are moving forward towards the clean audit space by consistently committing to take ownership of municipal performance practices, insisting on adequately qualified staff and effective performance management practices. The next logical step for these municipalities is to institutionalise these gains to sustain the culture of clean administration. This will surely uphold the public confidence that we witnessed during the presentation of the clean audit awards held at each of the municipalities.

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We agree with the Auditor-General that effective financial management and accountability in government departments should be raised to a higher level. One of his key findings centers on the lack of minimum competencies and skills of officials which are required for effective execution of their jobs. The ANC has identified skills training and development within the public service as critical to the pursuit of the national democratic revolution, not only in the economic sphere, but politically, socially and ideologically as well. Another fundamental obstacle to improving corporative governance is outlined in the National Planning Diagnostic Report, which argues that “a lack of clarity about the powers and functions of local government exacerbates the financial problems faced by municipalities critical factor impeding progress in service. This has led to municipalities being saddled with a burden of “unfunded mandates” in areas such as housing, libraries, roads, water treatment and other infrastructure. Attention therefore needs to be given to redefining the powers and functions of local government in the areas of housing,libraries, public transport, land use planning and local economic development.”5 We thus need to examine and develop better synergy between the capacity and functions of local governments.

The Auditor-General has also raised the issue of the lack of
consequences for poor performance, stating that approximately 73% of auditees showed a general disregard for accountability processes. This is extremely worrying. At the recent national policy discussions, this issue received extensive attention. Our Organisational Renewal document speaks of cadre development where accountability, capability and performance are prime building blocks and where we guard against opportunism, corruption and greed.Where Departments have struggled to manage their financial resources, these were placed under national administration by Cabinet last year in terms of Section 100 of the Constitution. The interventions demonstrate Government’s decisiveness in taking action to rectify and get service delivery back on track. In addition, the Department of Monitoring and Evaluation has been mandated by Cabinet to assess the quality of management practices in national and provincial government departments.

‘Performance is assessed against good management practice standards related to strategic management, human resource management, supply chain management and governance. Departmental assessments are discussed and agreed at senior management level in departments as well as verified by departmental internal audit units. This approach promotes ownership by senior management of the assessment process, leading to senior management action to address identified weaknesses. The assessment methodology was informed by a review by DPME of how these management assessments are carried out in other countries, including Canada, Kenya,New Zealand, India, Turkey and Russia.

The Auditor-General has stated that ‘the co-ordination of the capacity building support between the Premier’s offices, treasuries and cooperative governance departments at national and provincial levels, together with the South African Local Government Association (SALGA), is a precondition for the goals of Operation clean audit to be realized.’ As Parliament, we remain firmly in support of the work of the Auditor-General and will further strive to strengthen our oversight role by establishing inter-legislative forums to monitor performance. Our democracy came at a high price, and since its inception in 1994 it has been guided by the ideals of accountability, transparency and accessibility. We therefore deepen our commitment to each of these principles and in living our lives in honest and selfless service to the people of this country, we honour the legacy of Madiba and all those who fought so bravely for the freedoms we enjoy today. We dare not fail.