Disc Dem

Disc Dem

Friday, 24 July 2015

Disconnected Priorities

Mark Twain said, ”there are lies, damned lies, and statistics”, but there is an overwhelming body of evidence that demonstrates the present system of local government is fatally flawed and, unless fundamental changes are made, failure to deliver meaningful services at grass-roots level will be the main catalyst for the failed state that South Africa is presently destined to become.  Overreacting? I think not as, according to the Auditor General, in the 2013/14 municipal financial year, out of the 319 audits completed; 
·       22 municipalities and 8 municipal entities achieved clean audits. (9%)
·       138 municipalities received financially unqualified opinions with findings. This means that they accounted accurately for the financial transactions they have carried out. However, the ’with findings’ aspect indicates some potentially dodgy deals (41%)
·       84 Municipalities received ‘qualified’ audit opinions. This means that they were unable to adequately and accurately account for all the financial transactions and activities they conducted, and that the financial statements they presented were therefore unreliable. (25%)
·       8 municipalities received adverse audit opinions. In basic terms, this means that they did not feel accountable for the way in which they plundered the coffers. (2%)
·       59 municipalities received disclaimed audit opinions. These municipalities were unable to provide any evidence regarding the fair presentation of financial statements. In other words, anything could have happened to the financial resources entrusted to the municipality, and the auditor cannot express an opinion of any sort on whether the financial statements can be relied upon. (18%)
·       R695m was spent by municipalities on consultants (external service providers) to assist with the preparation of financial statements. This is over and above the fixed cost of those who are directly employed by municipalities to fulfill financial management and reporting responsibilities.  It is not rocket science to work out that around 81%, or R563m of that was (statistically) a waste of money.
·       R11.6 billion in irregular expenditure was incurred by municipalities as a result of “a significant breakdown in controls”.  R8 billion of this amount represents goods and services that were received but under dubious procurement practices, and for the balance of R3.6 billion there is no proof at all that the goods and services were ever received.
So, now we know that 50% of municipalities have no clue where our money is going, 41% know where it’s going but not necessarily how it is getting there, and only a paltry 9% know where it is going AND how it got there. 
It is interesting to note, however, that all a “clean” audit means is that designated procedures have been followed and there is a verifiable paper trail. Not that the money has been spent wisely.  A prime example is expenditures on new luxury vehicles for senior politicians.  Are they entitled to them under published regulations? – yes; have they followed procurement procedures? – yes; have they been approved in council? – yes; do they buy the vehicles? – yes;  can the municipality afford it? – NO; do they get a clean audit? – YES, because everything was done by the book.  In other words, all a clean audit really means is that they can spend our money any way they like, as long as the paperwork is neat and tidy. I doubt very much that even one municipality would come out clean from an audit performed to the same standards required for private sector audits.
Municipal elections in 2016 will entrench this unaccountable idiocracy for another 5 years, unless we make a move to do something about it.  The present Mixed-Member Proportional Representation System incorporating closed dual-candidacy party lists, is where the problem with accountability starts. How so? For true accountability to the electorate, a candidate must be totally dependent upon the direct votes they receive from us at the polls.  They are not. A dual-candidacy list allows them a second bite of the cherry in that, if we don’t vote them in directly, the party appoints them anyway as a proportional councillor.  All this serves to do is encourage candidates to brown-nose the party so that they are high enough on the list to become a councillor, no matter what our feelings are on the matter.
If we must keep proportional representation at this lowest tier of government, which is debatable, then I believe there should be two separate lists; one for constituency candidates standing for direct election, and one for proportional candidates. This way, we at least know that our views on constituency candidates are honoured, and not stomped on by political parties.
In my next post, I will explore the numerical arguments against proportional representation at local government level.  Some of the ideological ideas against it were outlined in my previous post "Our Democracy is Disconnected".
As a final thought, should the August 19th March against Corruption include local marches on the offices of every municipality in the country? These marches organised to demand an end to the personal enrichment of municipal politicians at the expense of service delivery. How about it Mr Vavi?

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