The Role and Functions of MPs in Promoting Financial Accountability of the State to the Legislature in South Africa

By Nyasha Mpani

Introduction

The work of Parliament and MPs is well articulated in the country’s constitution which is the supreme law of the country. According to the Constitution, the role of Parliament and Parliamentarians is to represent the people, choose the President, provide a forum for debate, pass laws and to oversee the executive. Parliament being the apex democratic law making institution deals with numerous issues concerning the nation. These issues can be of a political nature, economic, social, national security, foreign policy, science and technology, etc. These matters are of a complex, extensive and varied nature and Parliamentarians as prescribed in the Constitution are required to deliberate and debate on these issues in order to promote accountability and to protect the country’s resources from being plundered. Under the clause of separation of power, Parliamentarians and Parliament are therefore mandated to curtail the abuse of state power and resources by the executive. MPs have leading role to play in the strengthening of democracy and promoting financial accountability through oversight (55(2) of the Constitution). South Africa is reeling from a mounting problem of financial misconduct and abuse of public funds in the public sector. Prudent use of public funds is proving to be a pipe dream as a number of cases of corruption are coming out daily. The country is failing to adequately put measures or plugs that can counter corruption and the abuse of power. In light of the incessant growing problem of financial fraud and misconduct, the paper seeks analyse the role and function of Parliamentarians as a key tool to advance accountability. Given that institutional mechanisms are in place, the paper seeks to explore why the state’s financial accountability is important for our democracy, the extent to which the current accountability mechanisms are enforcing state’s financial accountability, challenges being faced by Parliamentarians in enforcing financial accountability and ways on how these challenges can be mitigated.

Defining Financial Accountability

Financial accountability is a critical component in any democracy as it promotes fiscal governance through ensuring effective and efficient utilization of financial resources. The central focus of the model of financial accountability premised on providing checks and balances on potential abuse of power by public officials (Community Law Centre: 2008). Dye and Stephenhurst (1997:12) note that accountability “is a process that subjects a form of control over departments and agencies, causing them to give a general accounting for their actions”. Its sole obligation is to try by all means to limit and curtail any chances for corruption of public offices and officials. The field of financial accountability strictly emphasizes the appropriate use of power so that public financial resources waste is reduced. Financial accountability comes in four different forms which include giving an explanation, providing further information when required, reviewing and revising and granting redress or imposing sanctions. These forms all work to hold public officials to account in their varied existence.

Why Financial accountability is important?

To promote financial accountability, the Constitution reiterates that Parliamentary oversight is key in making sure government is in compliance with public spending. Parliamentary oversight as a concept is made up of a number of aspects, which include political, administrative, financial, ethical, legal and strategic elements (Notshulwana, 2011; Fagbadebo, 2019). As an oversight body parliament is obliged to monitor and detect maladministration, abuse and misuse of public funds within the government machinery. Sections 42(3) and 55(2)(b) of the Constitution, detail the oversight functions of the Parliament.  It is prudent to note that oversight and accountability are constitutionally authorized functions of Parliament and Parliamentarians so that there is proper scrutiny of the executive and SOE’s action(s).  Without proper financial accountability, money from state purse will be drained off without any consequences. Gripping examples of why financial accountability is important can be seen in the ongoing KwaZulu Natal floods donations where “vultures” are already said to be circling to siphon money from state coffers. The Covid19 PPE scandal that was handed over to the Special Investigating Unit (SIU) to investigate after allegations of abuse is also another incident that justifies the importance of financial accountability and why it is crucial in protecting public funds from being out into misuse. Other notable cases include suspended ANC Secretary General Ace Magashule’s R255 million Free State asbestos scandal, Bosasa Scandal, Transnet, Eskom, SA Revenue Service (Sars) and Prasa R600-million fraud case. The most shocking scandal being the Karpowership deal which is reported to have gotten a nicodemus pass in September 2021. This was after it had failed to have its financial arrangements closed on time. With these corruption scandals and data provided by Afrobarometer (2021) shows that things are getting worse rather than better. Data in figure 3 below is indicative of how corruption has worsened in South Africa over the years and points to the need for more robust and enhanced financial accountability from the legislature.

Against this background, the South African parliament, has an important task of holding the government accountable and this can be done through checking the overindulgences of the executive powers and making sure that the operation of government is within the confines of the law (Somgqeza,2014). It should be noted that Parliamentarians, in theory do conduct horizontal accountability. Fagbadebo (2019) states that horizontal accountability is where misappropriation of public funds by civic agencies and branches of government are monitored by institutions of the state. These institutions can be the legislature and any other constitutionally elected anti- corruption body. This type of accountability demands answers to all actions of responsibility or dereliction done within government. The legislature as one of the oversight tools is thus the principal accountability instrument that represents the people. This horizontal accountability is through acting as a check or brake on the unrestrained use of executive powers, overseeing government decision‐making and providing a conduit between executive and civil society (Stapenhurst, et al, 2008). With the widespread problems of non-compliance, unaccountability and lack of answerability in South African public sector, parliament has an important oversight role to play in order to protect the serious implications of resource plunder for the future of the country. Part of the oversight role that must be done by Parliament and Parliamentarians is that of financial oversight and accountability. This mandates Parliament and Parliamentarians to critically scrutinize taxation, expenditure and public services in order to ensure that state resources and money is not misappropriated. In order to effectively conduct this exercise, Parliament has a parliamentary portfolio committee model which is designed in a way that strengthens the conduct of oversight and accountability functions. These legislative committee according to Rabrenovic (2009:75) are fundamental significant financial apparatus of parliament mandated to exercise financial accountability. Rabrenovic (2009:75) legislative committees are valuable in scrutinizing the conformism of the executive to matters of “regularity, propriety and value for money”.

Accountability Mechanisms

In order to promote financial accountability, Parliament and Parliamentarians have a number of oversight tools at their disposal that they can use to promote financial accountability in South Africa. These include state of the nation address, budget process, annual reports of government departments, other reports referred to portfolio committees and site visits. To promote financial accountability, MPs have to make use of these tools in order to effectively to supervise, control and examine issues to do with financial accountability in greater detail.

1. State of the Nation Address (SONA)

According to the South African Government (2021) the State of the Nation Address “is called by the President in terms of Section 42(5) of the Constitution and is a joint sitting of the two Houses of Parliament and one of the rare occasions that bring together the three arms of the State under one roof”. It is a platform that affords the President the platform an opportunity to speak to the nation on the general state of the country. SONA is a point of reflection on a plethora of political, economic and social matters. It gives the President an opportunity to articulate to the nation on the work of Government and sets out, priorities of the Executive for the year. More so, it is during this address that the President is traditionally expected to make some important Government pronouncements and reflect on what will be the focus points on service delivery for the year.

The State of the Nation Address is an important oversight tool for MPs as it assists the MPs in conducting and promoting financial accountability. SONA creates transparency with the public and accountability on the part of government and Parliament as a separate arm of the government has duty to make use of it in enhancing government’s financial accountability. After the President has made his SONA, parliamentarians can enhance financial accountability through inviting relevant government Departments to explain how the will implement the priorities set out in the SONA by the President and table their budgets. Parliamentary Committees are also obliged to use SONA to check whether the Executive delivered on priorities identified and if there was no misuse of public funds and resources. SONA affords parliament to have a retrospective focus where Parliamentarians and their committees evaluate gaps in progress made on implementing priorities identified the previous years. This enhances financial accountability as puts financial budgets and balance sheets of different government departments under spotlight ensure a thorough scrutiny is conducted.

2. Budget Process

The budget process is an important tool used by parliaments and parliamentarians to exercise oversight and promote financial accountability. The Budget Committee and the Public Accounts Committee are the two main committees central to the role of Parliament oversight in the budget process.  For Parliamentarians to effectively conduct their financial accountability they are assisted to analyse the budget through the Parliamentary Budget Office. The Parliament of South Africa has a Parliamentary Budget Office which was established in 2013. According to Section 15(1) states that the Parliamentary Budget Office is an independent, professional and non-partisan technical support unit to the Legislature and its committees on budget and financial matters. Its mandate is to provide a simplified expert analysis and impact assessment of the budget proposals and spending plans. In order to enhance financial accountability, are expected to objectively debate national budgets and other fiscal and monetary instruments.  In so doing MPs are tasked to thoroughly interrogate the national budget and key government economic policies and put forward informed, objective and well balanced proposals for consideration by the Executive.

The budget process is an important oversight tool to enhance financial accountability as it gives parliamentarians the opportunity to assess government proposed budget and how it is contributing to the realization of the nation’s aspirations. Parliamentarians can promote financial accountability by keeping their eyes on the ball (budget process) and ensure that every step is in accordance with the law.  The role of MPs in this process is to ensure that the Appropriation Bill is tabled in February every of every year, that budget votes are referred to the relevant Committees for consideration and report, that Committees receives briefing by the Departments, that Committees invite relevant stakeholders to give their input (public hearing) and that Committee report to the relevant House on findings and has made recommendations for budget to be amended. (see budget cycle below)

3. Annual Reports of Government Departments and Other Reports referred to Committees e.g., reports of Chapter 9 institutions, reports on work initiated by committees etc.

These are expected to be presented to Parliament every September of each year.  They are critical reports that MPs are required to extensively scrutinize if financial accountability is to be enhanced. According to National Treasury (2005:4) “Annual reports are the key reporting instruments for departments to report against the performance targets and budgets outlined in their strategic plans, read together with the ENE (for the national sphere) and Budget Statement Two (for the provincial sphere)”. These reports contain info on service delivery, financial statements and audit report. The documents focus on the department’s performance in the just ended financial year and also reports on how the budget for be the current financial year is to be implemented. In order to enhance financial accountability, MPs and their Committees have role of interrogating these reports. It is envisaged that MPs should overseer these annual reports in a similar fashion to how they oversee the budget.

Given MPs involvement in legislative, budget and in-year monitoring processes, they are ideally placed to play a greater and more organized role in promoting financial accountability. Through portfolio committees which MPs are members of, they are favored to have competent expertise in precise functional areas. MPs are well-placed to conduct oversight of government’s performance and supplement the current financial focus of the public accounts committees. The public accounts committee being made up of MPs has a key role to play in enhancing financial accountability as it is constitutionally mandated to be the ‘protector of the public purse’ (National Treasury, 2005). MPs in the public accounts account committee should consider the annual reports and focus on following;

• Issues raised in the General Report of the Auditor-General on Audit Outcomes;
• Issues of financial probity (e.g. fraud), as highlighted in the audit report or disclosed in the management report or in notes to the financial statements, or that come to the committee’s attention in any other way;
• Compliance with the PFMA and associated Treasury Regulations, the Audit Committee and the accounting officer in his or her management report in the annual report, taking into account matters that the Auditor-General may have reported on in this regard;
• The interrogation and evaluation of instances of over-expenditure (relative to appropriations), and other instances of unauthorised expenditures and the authorisation or non-authorisation of these expenditures for purposes of drawing up the Finance Bill, or initiating processes to recover the funds;
• The interrogation of instances relating to irregular and fruitless and wasteful expenditure.

statements of government, and the National Treasury’s adherence to its deficit targets.

• The functioning of risk management systems, including fraud prevention, financial management systems, personnel management systems (e.g. leave management and disciplinary processes) and other transversal systems in government. The Auditor-General reports on many of these issues in his General Reports. It is also the task of the Audit Committees to report on the state of these systems.
• Supply chain management and procurement, particularly large tenders, large capital projects and Public Private Partnership deals;
• The disposal of significant state assets, and any major financial or related losses suffered by government
• Corporate governance of departments, public entities and constitutional institutions
• The consolidated financial statements of government, and the National Treasury’s adherence to its deficit targets.

In addition, there are other reports that are referred to Portfolio Committees for instance reports of Chapter 9 institutions and reports on work initiated by portfolio committees etc. These are also important oversight tools that can be used by MPs in enhancing financial accountability. MPs can do so through their involvement with National Assembly or NCOP committees and have these reports thoroughly scrutinized for any mismanagement of public funds or resources.

4. Site visits

Visiting communities and site inspections to check service delivery/monitoring implementation of legislation is also an important oversight tool that can be used by MPs to promote financial accountability. While reports they do get from different government departments may represent a clean audit, it is imperative to note that a clean audit does not mean efficient service delivery. There is need for MPs to conduct these site visits so that they can inspect on the quality of infrastructure that has been built for the people by various departments and ascertain if it matches the figures represented in the reports. It is the role of MPs to be part of these site visits and to come up with committee reports on findings and make recommendations where necessary.

Challenges being faced by Parliamentarians in enforcing Financial Accountability

While legislatures are strategically positioned to enhance financial accountability, they are several factors that militate or impact them in effectively conducting this important role. These factors include capacity, sabotage and political polarisation. While the list is exhaustive this section will only focus on these three. The following section will in detail explain how each of these factors influence the ways in which they stand-in or hamper the legislative effectiveness for financial accountability.

Capacity

Conducting financial accountability is a very technical exercise that requires relevant skills and competencies. These technical skills and competencies are not required for one to be appointed a Legislature in South Africa rather people are appointed on party list basis.  Most of the MPs in South African Parliament are cadre deploys and they do not have the requites skills and competencies to effectively conduct financial accountability.  While reports are tabled in their different oversight committee, legislatures do lack technical capacity to use in their quest to do justice on matters to do with financial accountability. In addition, to lack of capacity of legislatures findings from a women’s caucus workshop conducted by DDP in February 2022 had some MPs indicate that the staff at parliament would should be assisting and offering technical advice on issues to do with accountability do have a low level of understanding on the issues and are incompetent. Furthermore, in some instances legislatures serve on more than 1 committee and even in those committees they are expected to read and scrutinize each and every report. This becomes a serious challenge as the legislatures may not find adequate time to thoroughly conduct financial accountability for all these committees given the time frame they will be working on. Legislatures indicated that the underperformance of certain staff members affects the performance of their work of enhancing accountability.

Sabotage

In addition to the issue of capacity, there is also an issue of sheer sabotage which is also another challenge that is acting as an impediment for legislatures to enhance financial accountability. Legislatures who attended the above mentioned training programme members sighted sabotage as one of the hindrances for effective accountability. They mentioned that some political parties and communities don’t allow them to do oversight work and this has a ripple effect on their accountability mandate. In these cases, some powerful politicians or officials who will be under investigation are accused of using their influence in encouraging their communities to disrupt or not to assist any parliamentarian or parliamentary committee that may want to conduct oversight work in any department or community. They mobilise their communities using propaganda and telling them that they are under political attack from their perceived enemies. The influence is also extended to some parliamentary staff members who then deliberately underperform and not cooperate with legislatures and thereby suffocate their work administratively. With administrative sabotage it is very difficult for a legislator to conduct financial accountability as he/she will be systematically incapacitated. Sabotage is also necessitated by legislature’s too much reliance on the support staff to get information from the departments. This gives room from sabotage and limits their room for financial accountability as, information from the departments is slanted in a particular way.

Political Polarisation

While the legislature gives legislatures the right to conduct financial accountability through various legal provisions that are enriched in the constitution, political polarisation is affecting effective financial accountability. South African politics is slowly becoming polarised, hostile relationship is fast emerging between different political parties in South Africa whom while having different beliefs and ideology should be united by the need to protect public coffers from being misused.  Khaile (2020:72) notes that “Good governance principles such as openness, transparency and accountability were replaced by distrust which impacted on access to information and cooperation between parties”.  The quotation from Khaile best describes the current situation in South Africa and projects a gloomy picture on what financial accountability is facing challenges and not being so effective. While the law mandates legislatures to conduct financial accountability, the method of decision-making in the legislature and legislative committees is now being done along party lines. MPs and their portfolio committees are now part of a highly politically divided legislatures. Legislatures and legislative committees because of this political polarisation that is further entrenched by the whipping system therefore have lost sight of their constitutional responsibility and as a result financial accountability suffering. Consequently, the issue of authority and power dynamics takes place and also has a negative impact on accountability. Here party policy or directive supersedes an individual’s choice or stance and thereby curtailing the legislatures’ powers to conduct financial accountability freely if the target department or government official is of his/her party and is of great influence and power. Therefore, financial accountability is not being informed by rationality but it is rather being informed by party political mandate. Financial accountability has been compromised as it has become partisan in practice making it highly compromised.

Recommendations

For financial accountability to be enhanced there is need to train legislatures on proper financial analysis and management. This training should also cascade down to their support staff at Parliament so that they are also well equipped on additional administrative support that legislatures need in dealing with intricate financial matters. Legislatures and their support staff need these skills so that they can be able to adequately and effectively formulate an informed and meaningful input on the financial management process in all government department, entities and the executive.

Secondly, there is need for an end to political polarisation which has a become a cancer that is heavily impacting on financial accountability that is thwarting preservation of public funds from being abused. Leadership from all political parties represented and not represented in Parliament should not bury their heads in sand and be unable to confront and deal with political polarisation. Leadership should be bold enough to confront each other frankly about accountability and responsibilities and not push for polarisation. Political differences matters less when it comes to enhancing financial accountability.

Lastly in cases of sabotage, it is recommended that legislatures use their parliamentary privilege to ensure that financial accountability by them and their committees is not sabotaged and is done correctly and diligently. Legal provisions in the constitution gives parliamentarians the mandate to conduct oversight work and they should be armed with the constitution which they swore allegiance to.

Conclusion

In conclusion it can be noted that financial accountability is important in South Africa as it enhances accountability and protects the national purse from being misused by government officials. Furthermore, the legislators with how strategically positioned they are they are very key in enhancing financial accountability through their oversight work/role. It has also been noted that issues to do with sabotage, political polarisation and capacity. Legislatures can enhance financial accountability through conducting SONA, budget process, annual reports and site visits. It is also recommended that political polarisation needs to be dealt with in order to have financial accountability to be enhanced. Issues to do with capacity needs to be addressed and have legislators and parliament staff well capacitated to deal with the technical issues on financial accountability.

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