KZN Internal controls under severe strain as officials turn a blind eye

By: Mark Steele, MPL DA KZN Spokesperson on Scopa This debate gives the House an opportunity to reflect on two things – the performance of the provincial departments in 2013/14 and that of Scopa itself. Overall the Committee concluded that ‘there has been progress and the provincial departments have been attending to the AG’s findings’. While issues of continuing concern for Scopa are specifically mentioned in the report, I want to highlight just one – the increase in irregular expenditure from the 12/13 total of R3.587 billion to R4.333 billion in 2013/14. The most serious aspect of this finding is that the external audit process identified R1.2 billion of this irregular expenditure (up from R430 million the previous year) while only R3.1 billion was identified by the departments themselves. This means the internal control procedures within departments are under severe pressure and officials are turning a blind eye to the requirements of the PFMA. We can also reflect on the way Scopa is currently performing. Members of this House may not know this but part of the AG’s mandate is also to consider how well the public accounts committee is performing their work of oversight. This opinion is contained in the AG’s overview dashboard report for KZN 2013/14. Disappointingly, the provincial oversight process is rated no better than ‘yellow’ on the dashboard report – not ‘red’ meaning a crisis is imminent but not ‘green’ either, showing that there is still room for improvement in the level of assurance provided. There are four matters I want to touch on in dealing with the on-going state of ‘yellowness’; Firstly there is the need for institutional continuity. When the membership or staff of a public accounts committee changes very rapidly then it takes time for the new personnel to settle into the work. This term we have had a new chairperson but fortunately she is a long-time member of the committee. However, there have been a number of new appointments in the new term and the committee is not yet firing on all cylinders. More importantly for the institutional memory of Scopa has been the loss this year of two committee stalwarts, Sherella Engelbrecht as committee coordinator for both Scopa and Finance, and the AG’s liaison representative for the Legislature, Steven Payne. Both have served this House for many years and their replacements will have to hit the ground running Then there is the actual process of Scopa hearings. I have suggested to both the current and previous chairpersons that the work of Scopa would be made more effective and the members of the committee contribute more as a team if the work was divided amongst members and special areas of inquiry allocated to particular members. This is the way it works in other Scopas. Unfortunately, here in KZN we have rather a mass rush for the line approach where it is very possible that important areas of the AG’s report may get lost in the process. I believe our approach has to be as systematic and deliberate as possible in order to maximise Scopa effectiveness We also need to make more use of the available oversight bodies. Previously this Scopa has benefitted from input from the provincial Audit Committee, the Premier’s Office Integrity Unit and the Treasury Internal Audit Unit. In this year’s series of hearings we had very little contact with any of these bodies and the quality of our oversight has suffered as a consequence. The one crucial area for Scopa is the report on forensic investigations. While Treasury keep us up to date with reports on investigations into cases of irregular expenditure, we continue to get very little meaningful feedback on the progress or conclusion of forensic investigations. There are in fact eight departments, including Education, Health, Transport, Social Development, Agriculture, EDT, Arts and Culture and Human Settlement where forensic investigations are still outstanding and where Scopa according to these resolutions is waiting for progress reports. Given that between them these eight departments account for around 95% of provincial expenditure it is obvious that the work of oversight is being compromised by investigations which drag on and eventually go nowhere And finally there is the accuracy of reports. If Scopa cannot trust the accuracy of what we are given by the departments then the whole process of oversight becomes a game where we play at oversight and the officials play at being held accountable. The Health Department for example has supplied Scopa with case numbers which we cannot confirm with the SAPS records. In the documents before Scopa CAS210/07/2010 refers to allegations of misconduct by a former General Manager. CAS 247/08/2013 refers to procurement irregularities at Addington Hospital, including the procurement of radiology equipment. We have checked these case numbers at the SAPS Point and Durban stations. CAS210/07/2010 is a case of urinating in public, CAS247/08/2013 is a motor licence issue. So what is the truth? This is more than just a minor discrepancy and the Department insists these numbers are correct. The DA will continue to ask questions about these cases until we get a proper explanation. [END] ##################################################################################### Scanned by MailMarshal – M86 Security’s comprehensive email content security solution. Download a free evaluation of MailMarshal at www.m86security.com #####################################################################################