Public Audit Bill: deliberations

Parliamentary Legal Opinion on commencement date for the Public Audit Act
Ms Lenzie stated that this decision was the prerogative of Parliament. The President only received the prerogative if it were delegated to him in terms of the provisions within any particular Act. Where the Act was silent on the issue, then the Act became effective on the date on which it was published.

The Chairperson invited members' views on who would decide the date of the Act's commencement.

Dr Woods felt the appropriate date would be 1 April 2004. The Committee was in an advantaged position to propose a date, as opposed to leaving it to the President, who had not had the advantage of considering the implications of any given date of commencement.

The Committee agreed with Dr Woods' proposal, especially since the date coincided with the start of the financial year of the Office of the Auditor General.

Finance surpluses within the Office of the Auditor General (Clause 38(4))
Mr Bell was satisfied with the provision as it stood.

Mr Tarr noted that the provision stated that the Auditor General could retain surplus funds "after consultation with the National Treasury". He was concerned that this would allow National Treasury to impinge upon the independence of the Auditor General. He asked if the provision allowed the Auditor General, after consultation, to apply his own mind.

The Chair confirmed that the Auditor General's consultation with the National Treasury did not require agreement with them. However, he had to reach agreement with the oversight mechanism on a course of action.

Although Dr Woods was satisfied with the provision, he was not sure that it was far-reaching enough. The provision addressed excess funds, which went beyond what the Auditor General had initially required. In attempting to secure the independence of the Auditor General, his was the only institution which did not receive funds through the Appropriation Act, but he was paid by Departments for his services. He might find during the course of the year, that he had gained deficiencies. In over-charging various entities because he had not performed as many services as he had planned, he had built up a surplus, which money would otherwise have been spent on services to people. This meant that the excess funds involved a moral issue, since it could be explained to departments who complained that they were short of funds, that the reason for that was that the Auditor General had taken the funds. For that reason, consultation was important. However, Dr Woods was happy to leave the contents of the provision as it was. It was possible that some individual might contest it at a later stage.

The provision was accepted.

Granting of Search and Seizure Powers (Clause 16)
The Committee did not discuss this matter again but prepared to vote. The Auditor General and his staff members were asked to refrain from speaking during this part of the meeting.

The ANC view, said Mr Tarr, was that this clause should be dropped. In their view, Clause 15, together with Clause 63, should be adequate for the Auditor General's purposes. The ANC had "expressed an open mind" as to whether the penalties in Clause 63 should be increased or not, in order to make them more stringent.

The Democratic Alliance, said Mr Bell, was in favour of retaining Clause 16.

For the IFP, Dr Woods said that he had hoped that discussion would take place on the issue. It had been interesting to hear the views of Justice and Constitutional Affairs Committee. Although he had no doubt that the Office of the Auditor General would use the search and seizure powers responsibly, he had other reservations regarding the matter, which he had previously raised. He was happy to go with the majority of the Committee on the issue. However, in the event that the Committee decided against granting the powers, the Auditor General should be notified that, should he find in future that the lack of powers proved an inhibition to the work of his forensic department, that he could at any time return to Parliament, to argue his case.

Mr Beukman (NNP) did not have a specific position on the matter, stating that even the clause should be removed, the common law position would remain, enabling the Auditor General to approach the Courts.

Mr Nair (ANC) asked if the Auditor General was granted a warrant to perform a search and seizure operation, why would that be unacceptable?

Mr Tarr (ANC) explained that the provisions in Clause 15, coupled with the offences and penalties in Clause 63, were quite extensive, and should be adequate for the purposes of the Auditor General.

Mr Bell (DA) expressed incredulity at that argument, saying it was common knowledge that the courts were "totally blocked up", and it often took up to two years for a case to come to court. The DA was attempting to give permission to the Auditor General to do his job, to complete forensic audits as quickly as possible, without having to resort to taking people to court, and risk jailing them for up to two years. Even if that were to happen, the forensic audit might never be completed.

The Chairperson attempted to explain the rationale of the ANC. In their view, the Auditor General was tasked to perform audits. The Committee had already established that forensic audits were not frequently entered into. The ANC were also mindful of the fact that, should search and seizure powers be granted to the Auditor General, other institutions would respond by requesting the same powers. Already, search and seizure powers had been granted to various other bodies. They felt it was more advisable to make use of the agencies which were in possession of those powers, to assist the Office of the Auditor General.

They were also concerned that the further granting of search and seizure powers could lead to situations where there were "contestation of turf" between different agencies, as is the case between the Scorpions and the South African Police Services presently. That would create an environment in which there would be unnecessary tensions amongst the agencies that had been created to strengthen the country's democracy.

Lastly, they considered that if private auditors were able to conduct forensic audits in the absence of those powers, then the Auditor General should be as well. All of these considerations brought the ANC to the conclusion that the Auditor General could well do without the powers of search and seizure, in performing his task.

On the basis of the majority decision, Mr Kameldien was instructed to remove Clause 16 from the Bill.

Mr S Adhikari (Parliamentary Legal Adviser) asked whether the possibility of summonsing of documents had been considered, as an alternative to seeking powers of search and seizure. Failure to comply with that summons, would invoke the penalty clause in Clause 63.

The Chair pointed out that Clause 15 provides the Auditor General with "full and unrestricted access", and if summonsing was a tool he could use, then he should make use of it.

Dr Woods felt that Ms Adhikari's proposition was an interesting one, saying it would conform with Parliament's powers in Clause 56 of the Constitution. It was less physically intrusive than search and seizure.

The Chair stated that the various parties could consider that idea as an option. He thought the ANC's view might be that because Parliament had the powers to summons, the Auditor General would be free to approach Parliament to make the summons on his behalf. He did not think, with the assistance of Parliament, and with the provisions contained in Clause 15, that the Auditor General would gain access to any documents which he required, without Clause 16.

The Chair said he wished to table the finalised Bill in the National Assembly by 27 November 2003. However, the Committee had not yet finalised their deliberations on Clause 22, and would await further comment from the Parliamentary Law Advisors. He proposed that Mr Kameldien present the Bill with all the proposed changes by the 17 or 18 November.

The Chairperson proposed that Mr Kameldien circulate a new document containing all the amendments, by Monday, 17 November, so that the document could formally come before the Ad Hoc Committee for adoption on Tuesday, 18 November.

Furthermore, in preparing the Committee report, the Chairperson suggested incorporating a document prepared by Dr Woods on the establishment of a structure to oversee the Auditor-General, to further inform the Rules Committee of the thoughts and intentions of the Ad Hoc Committee on the matter.

Dr Woods and the Chairperson would prepare the Committee report together, for the Committee to critique on 17 November.

In the light of the fact that Clause 16 had been voted out of the Bill, the Auditor General said that the Office of the Auditor General would do all it could to fulfil their mandate to the best of their ability. If they experienced any difficulty, they would approach Parliament. He expressed his appreciation for the speedy manner in which the Committee had dealt with the Bill.

The meeting was adjourned.