NCOP holds Workshop to strengthen Budget and Fiscal Oversight
The National Council of Provinces (NCOP) held a two-day Budget and Fiscal Oversight Workshop to determine successes and failures in conducting effective budgetary and fiscal oversight over the executive, reports Abel Mputing.
Speaking on Advancing the Mandate of the NCOP through Effective Budget and Fiscal Oversight recently, the Chairperson of the NCOP, Mr Amos Masondo, stated that the NCOP has certain constitutional mandates with the goal of transforming the lives of South Africans. “This workshop seeks to build a shared understanding of the NCOP’s role in utilising oversight and fiscal instruments expressed in a wide range of moneyrelated Bills and financial managements instruments that inform the NCOP’s oversight and accountability mandate,” he said.
This is to prevent abuse of public money and to ensure accountability in how taxpayers’ money is used. Mr Masondo added: “One of our critical interventions as the NCOP is to ensure that the executive delivers on its policies and the goals that it has set. We have to turn the existing oversight instruments into account to come up with effective strategies and tactics of realising the transformative prescripts of our Constitution.”
Participating in the workshop, the Deputy Minister of Finance, Dr David Masondo, spoke on understanding budget processes and intergovernmental relations in South Africa. He gave a broad overview of the fiscal and financial instruments enacted since the inception of the Constitution and the first democratic Parliament, that sought to ensure accountability in managing public finances.
In his view, much has been done to establish world-class public finance management
based on prudent economic sustainability, public financial management to bring about transparent budgetary frameworks. He cited the Division of Revenue Amendment Bill, the Medium Term Budget Policy Statement and other money-related Acts as examples of this. In his view, these instruments provide the NCOP with oversight ammunition to hold the executive accountable in a manner that equals the role of the Auditor-General. It can do so by using “departments’ and entities’ annual plans and key performance areas reports to hold them accountable”.
Speaking on the Constitutional Framework for Parliamentary Oversight: Understanding the Constitutional Role of Parliament in Fostering Fiscal Oversight and Accountability, the University of Cape Town’s Prof Hugh Corder said the Constitution is based on the idea of breaking away from the past. This gave the democratic Parliament a responsibility to be a watchdog of constitutional prescripts. Comparing the South African Parliament with the apartheid parliament, he observed: “Apartheid parliament was not a watchdog, it was a lapdog. It did not bark; it did not bite.”
In his criticism of the current Parliament, he asked why Parliament fell short of the expectations of the new Constitution, based on accountability, responsibility and openness in holding the executive accountable. He cited corruption over many years as proof of this failure. In his view, at the heart of this regression are parliamentary committees which are supposed to be critical engines of oversight and accountability, but which have been stunted by party whips.
This has blurred the separation of powers and eroded Parliament’s constitutional mandate. He then asked why committee chairpersons are not rotated or elected from the opposition. “Has Parliament considered electing chairpersons from the opposition and extend this practice beyond just the Standing Committee on Public Accounts?” he asked.
Fiscal accountability and oversight in the spotlight at NCOP workshop
On the constitutional imperatives for fiscal accountability and oversight of the NCOP, Prof Omphemetse Sibanda of the University of Limpopo, began with the position that there is no need for new legislation for oversight and accountability.
In his view, one can never say we have too much legislation when efficiency and equity have not been achieved. “We can’t discount that until there’s transparency in the management of public finance. We are all affected by how our fiscus is managed. Well and sustainable management of the budget and public finance accountability will ensure that there’s service delivery.”
As for the NCOP’s oversight role in the fiscal framework, he believes there is a need to craft new legislation or strengthen existing legislation to give the NCOP greater powers. In addition, there is a need of overarching legislation to give effect to the NCOP’s role in conducting oversight and accountability over various fiscal frameworks.
He also criticised party political patronage that has over time affected the efficiency of the NCOP and Parliament in executing their oversight mandate. This has contributed towards them “not exacting their oversight influence on either Public Protector recommendations, Auditor-General or courts’ findings that call upon it to act impartially due to party political considerations rather than their oversight mandate.
In concluding the workshop’s first session, the Chief Whip of the NCOP, Mr Seiso Mohai, believes that despite challenges, qualitative strides have been made to build an activist Parliament that seeks to realise the principles of a better life for all. However, work must be done to address problems identified. He also raised the need for funding a parliamentary model that is independent from the executive. This would uphold the principle of the separation of powers and would render Parliament more effective in conducting oversight and ensuring accountability.
Parliament’s powers to amend the national budget Discussions on the second day of the workshop focused on Parliament’s powers to amend the national budget, as well as oversight on government spending in terms of the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA).
Financial experts, academics, as well as officials from the National Treasury and related state institutions in the finance and economics cluster, joined Members of Parliament in a virtual platform for the two-day Budget and Fiscal Oversight Workshop.
Commenting on the topic Parliament’s Scrutiny of the Budget: Money Bills Amendment Procedure and Related Matters Act, Dr Seán Muller, from the University of Johannesburg’s Public and Environment Economic Research Centre, said the Act gives Parliament wide-ranging powers and even allows the legislature to propose an alternative budget. However, Parliament lacks the capacity to do so.
“However, as much as the Act gives Parliament the powers to amend the budget, there are requirements to be followed, such as ensuring that any amendments to the budget do not harm service delivery,” Dr Muller said.
He said the executive opposes the idea of Parliament amending the budget, as it believes that the Money Bills provide enough opportunity for Parliament to make inputs on the budget in advance.
“The executive argues that amendments by Parliament are not a requirement if there is that kind of engagement, but the legislature should not downplay the amendment powers that it has,” said Dr Muller.
He also told the workshop that the fact that Parliament has never made any substantive amendments on all the Money Bills tabled by National Treasury could create an impression that Parliament is simply rubber-stamping.
Another academic, Prof Jacobus Pauw from the University of South Africa, in support of Parliament’s powers provided in Money Bills said: “The exercise of greater powers on the budget by Parliament will not be against fiscal discipline and the amending powers should be taken seriously.”
Other speakers supported proposals to make Money Bills less onerous. Some participants mentioned the difficulty of Section 85 in particular, saying that the relevant parliamentary committees do not have adequate resources to deal with it.
The workshop also heard that South Africa has numerous pieces of legislation governing the management of public finances, yet there is not enough improvement. In addition, reports show that Parliament’s oversight role does not take place as it should, resulting in inadequate accountability.
Workshop participants also said that committee oversight is hampered by a poor understanding of the budget cycle. Parliament committees do not use National Treasury and Auditor-General’s reports to hold the executive accountable on spending. “Parliament should hold us accountable in terms of what the PFMA says; whether as National Treasury we are playing our role as articulated by law,” said the National Treasury’s Director-General, Mr Dondo Mogajane.
NCOP Delegate and Chairperson of the Select Committee on Cooperative Governance and Traditional Affairs, Water and Sanitation and Human Settlements, Mr China Dodovu, questioned why with all the legislation, good systems and structures, the country continues to face challenges, including deteriorating finances in municipalities, provincial government and national government? “The big problem we are failing to confront is poor ethical leadership, both administratively and politically, and it inhibits accountability,” said Mr Dodovu.
NCOP Chief Whip, Mr Seiso Mohai, said the workshop has identified the need to facilitate public participation in the budget process and fiscal policy. “The budget is inherently a policy function residing in the National Treasury, and the question to be asked is whether Parliament has the requisite capacity to amend the budget,” he said.
The Deputy Chairperson of the NCOP, Ms Sylvia Lucas, said: “We need to strengthen oversight to make sure the budget responds to the socio-economic needs of our people.”