Mr Speaker, comrades and hon members, from the onset let me thank my comrades in the committee and our dedicated staff for their revolutionary committee spirit displayed consistently when dealing with our work. There is much to do, and only collective effort has seen us through. We are presenting to the House reports on the Departments of Arts and Culture, Sport and Recreation, Boxing SA, the National Arts Council, the SA Heritage Resources Agency, and the Public Service Sector Education and Training Authority.
The recommendations we are making mark a substantial departure from previous practices, in that they introduce the element of continual monitoring, which was not there before, that is a requirement for quarterly progress reports on corrective measures. This, however, places an obligation on the House and the committee to be able to monitor compliance with timeframes.
From our side, as the Standing Committee on Public Accounts, Scopa, we have done all our planning to monitor compliance, but will still look to the Speaker's Office for leadership and guidance. From our side, we have every intention of coming back to the House in case departments and entities fail to comply with the stated timeframes.
The Public Service Sector Education and Training Authority got a disclaimer of audit opinion and has ongoing issues of concern, as its liabilities exceeded its assets by R19,9 million - and there is a lot more that is not going right.
Boxing SA, the National Arts Council and the SA Heritage Resources Agency all received qualified audit opinions. Transversal issues in these entities include material losses, expenditure management challenges, compliance with laws, irregular expenditure, and fruitless and wasteful expenditure. Those of the Departments of Arts and Culture, and Sport and Recreation are all unqualified, but with emphasis of matter. Issues of concern to Scopa include expenditure management; irregular, fruitless and wasteful expenditure; supply chain management issues; and asset management.
We are particularly looking forward to the report of the Special Investigating Unit on the investigations into the Department of Arts and Culture. This department has unauthorised expenditure of R41,7 million and irregular expenditure of R64 million.
Even though those of the departments are not qualified, as Scopa we are concerned that many of our national departments remain in the space of unqualified with emphasis of matter. There is no movement towards clean audits. In the past financial year, only three departments got clean audits, with 30 departments in the space of unqualified audits with emphasis of matter.
We want to urge that there should be structured co-ordination between ourselves as Scopa and the portfolio committees to ensure that officials are held accountable for noncompliance with legislation and regulations. We thus present to this House our reports, and thank members in advance for their anticipated support. Thank you.
There was no debate.
Chairperson, I move:
That the Reports be adopted.
Declarations of vote:
Speaker, the first thing that comes to mind when a report from Scopa is tabled in this House is: So what? Will it make any difference to the way in which the people's money is managed? The sad reality is that the answer is no. Report after report sets out failure in the public financial system. That failure is systemic and not easy to resolve.
When a system starts to break down only a bold intervention can restrain the breakdown and start to reverse the process. That is what Scopa is meant to do. It must identify what has failed, make recommendations to remedy the failure, and ensure that those responsible for mismanaging the people's money face the appropriate consequences.
For the financial management of a department to operate effectively, it needs to have the basic building blocks in place; it needs to have a clear financial management procedure; it needs to have a robust internal auditing function that monitors compliance with financial procedures; and it must have an effective audit committee that receives regular reports from the internal audit unit so that it can alert management to any financial management problems before the annual audit is conducted by the Auditor- General. These basic and simple principles are not in place, and the result is that the people's money is being squandered fruitlessly, wastefully and irregularly by cadres who simply don't care and are not held accountable.
At a time when our economy has been battered by the perfect storm of fallout from the global financial crisis, incoherent economic policy and creeping systemic rot in the public financial system, Scopa should be at the forefront of holding the executive to account for financial mismanagement.
As a committee, Scopa has identified its problems in receiving the required improvement reports from the departments that appear before it. These reports remain backlogged in the Speaker's Office, if indeed they are submitted at all. An innovation to receive quarterly reports is a welcome step in the right direction, but this must happen and must happen very soon.
There should be no confusion about the role of Scopa. It does not compete with other committees as those who seek to further extract its teeth would suggest. Scopa is Parliament's committee specifically dedicated to public accounts. It has oversight over all of the people's money, irrespective of where in the system it happens to be spent or when it was spent. Scopa must pursue financial justice for the most vulnerable members of our society who feel the gravest consequences from a system that is already leaking over R30 billion per annum according to the Special Investigating Unit.
There should be no confusion that executive accountability to Parliament by Scopa is political and that Ministers must be held to account. They should be monitored and evaluated on their attendance of Scopa hearings; and, if they fail, the Cabinet must be held collectively accountable. And if that tomfoolery continues, the President must be held to account. Scopa needs to up its game and it needs to start now. Thank you. [Applause.]
Hon Speaker, first of all I would like to associate my remarks on behalf of the IFP with the report that was tabled by the hon chairperson of the committee, the hon Godi. I would just like to indicate to this House that sometimes people mistake the role of Scopa. Scopa is a committee that actually deals with issues after the fact. At the moment we are processing some 300 financial reports and statements of public entities and government departments. Those reports ended on 31 March and were tabled only recently.
So, therefore, I endorse what the hon chairman of our committee has said in that the role of portfolio committees in doing oversight of their respective departments is extremely important. What we have noticed of late and which is very encouraging is that portfolio committees are taking a keener interest in the financial issues as they relate to their own departments, which they have oversight over.
And, I think, what is also quite encouraging is that in the past 18 months or so a number of Ministers have been attending Scopa hearings, and this is very encouraging. When I look here to my right to the hon Minister of Health, I must say without fear or favour that the hon Minister of Health was one of the Ministers that conducted himself in an absolutely wonderful manner when he appeared before Scopa in terms of answering questions and knowing exactly what his department was about. [Applause.] Now that is the kind of intervention that we need from the hon Ministers, because as the IFP we believe that the buck for accountability stops with the executive authority.
Also, although our legislation - the Public Finance Management Act - provides that a director-general or head of department is responsible for financial matters, I think this House needs to look very closely at the Public Finance Management Act and amend it to ensure that the buck stops with the Minister. A Minister or a Deputy Minister cannot sit idly by and watch governance in his or her department go down the tubes. Ministers have the responsibility to ensure that they rule from the top.
We also suggest that this House and all Members of Parliament take a very keen and active interest in the reports of Scopa, because it is through this mechanism that we can hold the public service to account. It is quite a tragedy - like a Shakespearian tragedy - that 18 years into our democracy the Auditor-General is still picking up issues of noncompliance by officials: not keeping invoices, not following supply-chain management rules and regulations. This has to stop, and we have to move to a situation in which we are looking at value-for-money audits. We need to know that the taxpayer is getting value for taxpayers' money and not just that a department is complying with accounting requirements. So, I do trust that hon members of all portfolio committees and this House will assist Scopa and assist us in ensuring that we hold the public service accountable for what they do or what they do not do correctly. Thank you, hon Speaker.
Motion agreed to.
Seventeenth Report of Committee on Public Accounts on Report of Auditor- General on Annual Reports and Financial Statements of Department of Sport and Recreation for 2010-11 Financial Year accordingly adopted.
Eighteenth Report of Committee on Public Accounts on Report of Auditor- General on Annual Reports and Financial Statements of Boxing South Africa for 2010-11 Financial Year accordingly adopted. Nineteenth Report of Committee on Public Accounts on Report of Auditor- General on Annual Reports and Financial Statements of Department of Arts and Culture for 2010-11 Financial Year accordingly adopted.
Twentieth Report of Committee on Public Accounts on Report of Auditor- General on Annual Reports and Financial Statements of National Arts Council for 2010-11 Financial Year accordingly adopted.
Twenty-first Report of Committee on Public Accounts on Report of Auditor- General on Annual Reports and Financial Statements of South African Heritage Resources Agency for 2010-11 Financial Year accordingly adopted.
Twenty-Second Report of Committee on Public Accounts on Report of Auditor- General on Annual Reports and Financial Statements of Public Service Sector Education and Training Authority for 2010-11 Financial Year accordingly adopted.