By Zaheer Cassim and Nicky Rehbock
South Africa’s public service is in our bad books again following damning revelations that financial misconduct in state departments could exceed R1-billion for the 2011/2012 financial year. All this while schools go without vital learning material, desks and flushing toilets; hospitals limp along with shortages of life-saving drugs, linen and running water; and needy families go without proper shelter as RDP schemes malfunction.
We can only imagine how many lives could have been improved had this R1-billion gone to those who needed it most, instead of lining the pockets of a well-connected few. The public service, for its failure to put the poor first and self-interest last, is our zero of the week.
The cost of financial misconduct has spiked rapidly in recent years, from R100-million in 2008/09 to R346-million in 2009/10 to R932-million in 2010/11. While exact figures aren’t out for 2011/12 yet, the estimation is that the cost could exceed R1-billion for this period.
These revelations emerged in a recent report issued by law firm Edward Nathan Sonnenbergs (ENS) titled The real state of the nation. Figures quoted in it are based on data collected by the Public Service Commission, while anecdotal details stem from the firm’s own experiences in probing financial misconduct in government departments.
ENS senior forensics manager Peter Allwright told Corruption Watch the idea for the report came about as an attempt to understand why government takes so long to act on a case, even after his forensic team would gather all the evidence, investigate, compile forensic reports, draft affidavits, name suspects and hand in a complete product to the police.
Allwright says that although the term financial misconduct only covers fraud, theft and misappropriation of funds, such unchecked behaviour impacts directly on corruption levels as it allows government officials to gain confidence and take more risks in murky dealings.
The report notes that the Hawks, the Special Investigating Unit (SIU), the Asset Forfeiture Unit, the Multi-Agency Working Group and the Public Service Anti-Corruption Unit are “fighting a losing battle to stop financial misconduct in the public service”.
When one looks at the Public Service Commission figures from 2009/10, the most accurate according to Allwright, KwaZulu-Natal had the highest percentage (21%) of its budget lost to financial misconduct among all the provinces in the country. The Northern Cape (2.6%) had the best record, followed by Mpumalanga (2.8%).
While public service institutions are obliged to report all forms of financial misconduct, as outlined by the Public Finance Management Act, many are not doing so – says Allwright.
“It takes the police six months to get bank statements and phone records,” he explains. “In many cases public officials are able to resign before the formal investigation is even over and we cannot get the Asset Forfeiture Unit involved because the assets have been sold.”
But Allwright concedes the problem is more than just the police. Anti-corruption bodies such as the Hawks and the Special Investigating Unit are under-resourced and understaffed.
In April the SIU was criticised in parliament for not coming close to its recovery target of R30-billion in procurement irregularities over the last three years.
Last year the Public Service Commission review of governments’ anti-corruption hotline exposed the organisation’s inability to tackle corruption seriously since it was set up in 2004.
The hotline has only managed to retrieve R110-million from offending public servants and instigated only 603 sackings.
Allwright believes that if experts from the private and public sectors set up a specialised ask team to tackle financial misconduct swiftly, more public officials would be caught.
At the moment, public servants often simply quit their jobs before disciplinary action is taken.
Harsher penalties and blacklisting all offenders would also help reduce financial mismanagement and subsequently corruption.
“Public officials have a particular set of skills. If they cannot find work because they have been blacklisted, then they will think twice before doing something like this,” Allwright says.
Highlighting the lack of meaningful consequences, the report notes that in 2009/10, most public officials found guilty were simply handed a final written warning and only 20% were fired from the public service.