FOUR YEARS AFTER the Heath special
investigating unit accused Willowmore district surgeon Dr Jacobus van
Ravensteyn of defrauding the Eastern Cape health department of more
than R500,000 his case has not been finalised and he is still being
employed in the same job. According to reports van Ravensteyn submitted
a claim for treating 40,596 patients for the 1995-96 financial year
despite the fact that the total population for the Willowmore district
is only 12,000. After he had already been paid, the Auditor-General’s
office picked up the discrepancy and appointed private auditing firm
Deloitte & Touche to investigate. It found that van Ravensteyn had
been very busy indeed. On May 4, 1995, for instance, he claimed to have
seen 472 patients — a consultation rate of one patient every minute in
an eight-hour working day. His patient claims for August would have
required him to work 22-hours a day every day; his 1995-96 travel
claims of 49,157km meant he had to have been on the road (travelling at
100km an hour) eight hours a day for 61 days.
This is not an isolated case. Almost four years after he was first
arrested on suspicion of fraud in the department of public works in
East London, Dennis Maart is still suspended on full pay. He was
originally arrested in July 1996 after fraud involving R450,000 was
uncovered. The money was allegedly lost as a result of a number of
transactions involving bogus contractors and employees working on
non-existent projects. Maart appeared before the Zwelitsha District
Court but no charges were put to him and the case was postponed.
Both of these cases were referred to the Heath special investigating
unit and will, one hopes, lead to the full amounts being recovered. But
the question remains why both officials are still being paid salaries
out of public coffers and why, in the case of Dr van Ravensteyn, he is
still in a position of responsibility for the administration of public
resources. The fact is that despite their excellent work, public
protection agencies such as the Auditor-General’s office, the Heath
unit and the Public Protector do not have the capacity to follow up and
monitor what happens to officials who are found guilty of acts of
corruption. Nor can they guarantee that such officials will be
effectively disciplined, retrained or dismissed from the public
service. At best, they provide only a limited deterrent to corruption
and maladministration.
Before it can investigate any case the Heath unit has to liaise with
four separate government departments in order to have a presidential
proclamation issued — a time-consuming process. Once the investigation
is completed, and if the special tribunal attached to the unit finds
the official guilty, he or she is compelled to repay stolen assets to
the state. At this stage the unit may recommend that the official be
subjected to internal disciplinary proceedings or criminal prosecution.
However, it has no mandate to monitor or enforce these
recommendations.
The Auditor-General’s office must generate its own income by charging
the institutions that it audits. In many instances, however, because of
a refusal or inability to pay for the audit, it cannot gain access to
the financial statements of public institutions. Even when payment is
secured, the failure to submit financial statements, deficiencies in
accounting systems and the incomplete submission of records may make it
impossible for the Auditor-General to "express an opinion" on the state
of the institution’s financial management. In such cases there might be
not only a lack of financial accountability but wholesale corruption.
The information that is eventually released by the Auditor-General’s
office is often of a highly general nature, which makes it very
difficult to track individual cases of misconduct within
departments.
The Public Protector has the power to investigate and report on a wide
range of activities within the public service, from misconduct to
maladministration and unlawful enrichment, and to take "appropriate
remedial action". According to the Public Protector Act, 1994, however,
such remedial action is restricted to mediation, conciliation and
negotiation. The Public Protector may also offer advice on other
appropriate remedies. Again, this agency has no specific mandate to
follow-up and enforce the recommendations that it makes. The onus is on
departments to report back on their activities to the Public
Protector’s office. Departments that choose to ignore its
recommendations are unlikely to report back.
Even in clear-cut cases of corruption, where officials have been
investigated and found guilty of having abused their office for the
purpose of enriching themselves, the most that these agencies can do is
to force the official concerned to repay state monies and to recommend
disciplinary or criminal proceedings. They can neither enforce these
recommendations nor monitor their lack of enforcement. But if public
officials who have been investigated and held responsible for acts of
corruption continue to be employed, this sets the precedent that
misconduct will be tolerated by public service management. There is no
effective deterrent to corruption in the minds of public officials
because the worst thing that can happen, in the event of their being
caught, is that they will have to endure the inconvenience of repaying
the full amount to the state. In many cases this amounts to being
"punished" by being given an interest-free loan. Clearly an efficient
and accountable public service cannot emerge under such
conditions.
The Public Service Accountability Monitor (PSAM) based at Rhodes
University is devoted to filling this gap by following up individual
cases of reported misconduct in the public sector of the Eastern Cape
and to make its findings public. The essential tool for this work is to
create a standardised database. The results of our first 20 cases,
which include the two already mentioned, will be published on our web
site later this year. There is no shortage of cases. When the PSAM
began its work in March 1999 the province had already acquired a
reputation for the mismanagement of public resources, corruption and
failed service delivery second only to that of Mpumalanga.
While there is widespread public concern about the frequency with
which acts of corruption are reported, what is even more disturbing is
the scale of financial maladministration in the province. The
Auditor-General’s 1996/1997 financial audits of Eastern Cape
administration departments provide some indication of the extent of the
problem:
- nine out of ten departments failed to close off their accounting records at the end of the financial year;
- nine out of ten departments failed to employ adequate loss control procedures;
- nine out of ten departments either submitted inadequate personnel files for auditing or failed to submit them at all;
- eight out of ten departments failed to mark payment vouchers and supporting documents as "paid" to prevent the re-use of these vouchers and documents;
- all ten departments submitted insufficient documentation in support of payment vouchers;
- eight out of ten departments failed to submit proper bank reconciliations;
within at least three departments
financial bookkeeping and record keeping skills were manifestly
incompetent.
Unauthorised expenditure in the department of corporate services alone
shows that 19 wristwatches were purchased for long service awards at a
cost of R11,308, but it could not be established to which staff members
they were awarded. The budget for bursaries was increased by R2 million
to R2,172,000 without explanation. Staff who had left continued to
receive salaries 20 months after their names had been removed from the
payroll, resulting in R1,084,281 in overpayments. An ex-employee was
advanced R100,000 — or R91,000 more than the maximum permitted.
Vouchers in support of payments of R996,360 for motor vehicle finance
were either missing or incomplete. Of 14 vehicles allocated to East
London for the year, ten could not be accounted for. Some of these
errors might be considered trivial but collectively these ten
departments were responsible for unauthorised or unaccounted for
expenditure in the region of R190 million. And this in a province where
87 per cent of the population do not have basic sanitation services,
nearly half do not have basic water supplies, 27.7 cent are illiterate,
and where one in two adults is unemployed.
The state of the administration of public resources at the local
government level in the province is even more alarming. According to
provincial Auditor Singa Ngqwala, the Auditor-General’s office was
unable to express audit opinions on the 1997-98 accounts and/or
financial statements of 42 of the province’s 84 local authorities due
to incomplete or non-submission of financial statements, deficient
accounting systems, and a lack of supporting documentation.
This effectively means that the Auditor-General cannot account for the
state of financial management within exactly half of the province’s
local authorities for this period — a deeply disturbing state of
affairs. If we consider that R37.7 billion was allocated nationally as
the operating budget for 833 municipalities in1998, then on the basis
of an equitable share of this amount, each municipality would have been
granted roughly R43 million. In that case the Eastern Cape’s 84 local
authorities would have obtained an approximate collective operating
budget of R3.6 billion. This paints a picture of staggering financial
mismanagement at the local government level in the province: with R1.8
billion in taxpayers money that cannot be accounted for.
Nevertheless, it would be wrong to conclude that all of these amounts
of unaccounted expenditure have been deliberately siphoned off for
"corrupt" purposes — that is as a result of "the illegal abuse of
public office for private gain". In many cases officials may have
corruptly enriched themselves at the expense of the state, but in many
others it may simply be that these expenditures were not adequately
authorised or substantiated because of the inexperience and incapacity
of the officials administering them.
At present we do not have any objective and reliable data that could
indicate which of these two factors is responsible for the poor
administration of public resources within the province; "deliberate and
intentional corruption" or a "benevolent and honest lack of capacity".
By providing such data the PSAM will enable ordinary citizens to make
informed decisions as to which of these two factors is at play in
individual cases of misconduct within the public sector. We believe
that there should be no place for public officials who have committed
acts of corruption: they should be dismissed. There should also be no
place for incompetent public officials in the management of public
resources. If public officials genuinely lack financial and
administrative skills then they should be retrained and have their
skill levels upgraded, without delay.
The provincial government is well aware of the province’s poor record
on delivery and in rooting out corruption. Eastern Cape premier
Makhenkesi Stofile has just announced that he is setting up a
provincial anti-corruption unit, a recommendation that emerged from the
anti-corruption summit he convened in November to help restore public
confidence. Many speakers at that summit cited the legacy of apartheid
social engineering as the main cause of the province’s plight. It is
impossible not to have some sympathy with this view. The new provincial
administration had to incorporate the two former bantustan
administrations of the Ciskei and Transkei comprising 38 departments
and 125,300 civil servants.
More importantly they had to deal with officials steeped in a corrupt
client-patron culture that provided low-wage, unskilled jobs to workers
chosen on the basis of their loyalty to the political leadership of the
day. Because individuals were appointed to public sector jobs during
the apartheid era on the basis of personal connections rather than
their skills, competencies or actual performance, the notion of
entitlement to a wage without any form of corresponding social
responsibility became widely entrenched. Many long-standing members of
the apartheid and bantustan administrations continue to think and act
in these terms. It is easier for newly-appointed officials to join this
culture rather than challenge it. Thus an ethos of entitlement and
secrecy continues to influence the working practices of the public
service.
But while the legacy of apartheid may well explain why the Eastern
Cape is in the underdeveloped state that it is, it does not excuse the
consistently poor state of management of public resources within the
province. Not all current values and beliefs within the public service
have been carried over from the apartheid era, after all. In opposition
to those who believe in the entitlement of public officials and their
right to act in an unaccountable fashion are those who are attempting
to entrench a new set of organisational values. These values are set
out in South Africa’s excellent legislation for regulating the conduct
of public officials and ensuring their accountability. The Constitution
itself binds all public officials to act in accordance with the
following basic values and principles:
- a high standard of professional ethics;
- efficient, economic and effective use of resources;
- a development orientation;
- impartial, fair, equitable and unbiased provision of services;
- public participation in policymaking;
- accountability;
- transparency and the provision of accessible and accurate information to the public;
- good human resource and career development practices.
These principles are fleshed out in
considerable detail in the 1994 Public Service Act and the 1994
National Exchequer Act (to be replaced by the 1999 Public Finance
Management Act). But new officials who want to follow these principles
find themselves in a weak position as they encounter considerable
resistance from those who have a vested interest in maintaining the
status quo. Nothing would do more to strengthen the position of those
groups and individuals fighting for transparency and accountability
within the public service than to see corrupt officials promptly
dismissed. The PSAM aims to provide the public and public service
management with the information that will make such action more likely.
Our monitoring will help to ensure that corrupt and other wayward
public officials will no longer be allowed to flout public service
regulations and their constitutional obligations with impunity.
How PSAM monitoring works in
practice
1) Cases involving alleged public sector misconduct and corruption in
the Eastern Cape (dating back to 1996) are drawn from sources including
newspaper reports, the Heath unit archives, Auditor-General’s reports,
transcripts of public accounts committee hearings, information from
NGOs and community based organisations, and a standing request to all
departments for a list of current disciplinary actions involving
misconduct. For each case we analyse the specific sequence of events
with respect to the public service regulations that were either
breached or not implemented and establish what disciplinary procedures
should have been taken against the individual(s) involved.
2) The case profile is then entered on our database and a PSAM
researcher conducts a preliminary follow up in order to establish
important background details for the case. This preliminary work
involves many time-consuming phone calls during which the researcher is
often passed from pillar to post, but it is essential to be fully
primed for the next stage in the monitoring process.
3) A list of questions about the case is faxed to the permanent
secretary of the relevant department. We ask what regulations were in
fact breached; what disciplinary measures were taken; whether the
officials concerned are still employed by the department; what efforts
have been made to recoup losses, and what new management procedures and
working practices have been introduced to prevent a recurrence.
4) After a notice period of approximately two weeks a recorded
telephone follow-up interview is conducted with the permanent secretary
in order to obtain an official response to these questions. We then
transcribe this interview and publish it on our public access web site.
As our findings from individual cases are progressively added to the
database and uploaded onto the website we hope that this resource will
gradually grow into a full and indispensable record of how public
sector corruption and mismanagement is dealt with in the Eastern
Cape.
Colm Allan is
co-ordinator of the Public Sector Monitoring Unit at Rhodes
University
