Friday, March 22, 2013

R24.8bn Reasons We Are Immune To State Rot

Brendan Boyle | 22 March, 2013 00:59

Brendan Boyle
Image by: The Dispatch

Nearly 20 years into our democracy, South Africans are stalled by failure fatigue.

We just cannot muster another round of indignation about another report about another department, or institution, that has dropped the ball - or sold it for the price of a Chivas and a bowl of nuts.
When auditor-general Terence Nombembe gave us his annual reality check last week, we largely shrugged it off. So what if only one in five of the institutions he vetted could give a proper account of their spending? Does it really matter that the number of clean audits fell from 152 in the financial year to March 2010 to 132 a year later, and to 117 in the year to March 2012?
Nombembe's non-renewable contract comes to an end later this year. He has worked long, hard and well - he is definitely one of the good guys - so I am sad for him that he will go without having achieved the goal he set out when we spoke in September 2009.
He said in that interview that he hoped to instil a culture of clean governance across all departments, provinces and municipalities by the end of his term.
"The glaring need is the leadership commitment to put the right systems in place, to monitor those systems and to take action when things are moving in the wrong direction. [We] will be looking at the extent to which departments promise a house [and] a road and [when] we go and look, the road is not there," Nombembe said.
In fact, he is still getting these departments and institutions just to write down what they claim to have spent money on and how they decided who should get contracts to render services.
The one number from Nombembe's dismal litany of negatives that did seem to stick for a few days was the R24.8-billion wasted by provincial governments, which he characterised as the epicentre of "disintegration".
In fairness to the provinces, not all of that money evaporated into the clouds that shade the lives of our president's extended network of friends, relatives and party colleagues. There will have been a few classrooms built, a few pipes laid and a few intersections tarred.
Nombembe's point was that the provinces, and their subsidiary departments, could not explain what they did with the money, or what they got for it.
The South African Institute of Race Relations joined the game of calculating what could have been bought with the money:
  • 400 new schools, 460000 basic houses or 24 specialist children's hospitals;
  • 7.4 million child support grants, 1.7 million state pensions or a year at university for 1.2 million students; or
  • 550 new prisons, or 120 Nkandlas.
Certainly, that R24.8-billion - about R500 for every living South African - could have been better spent. But that is missing the point - it should never have been spent at all. That amount would have covered a third of the state debt cost of R76-billion in that financial year - it is almost equal to the amount that Finance Minister Pravin Gordhan slashed from the contingency reserve in order to deliver a plausible national budget last month.
But we had to borrow the money so the provinces could waste it, and a future generation will have to pay it back.
Nombembe continued last week to blame the poor provincial report card on a lack of leadership from the top.
"It is evident from this year's results that audit outcomes only improved in areas where the leadership adopted a hands-on approach to addressing shortcomings in their respective portfolios," he said.
That points to the second area in which we, the tax-paying public, are being robbed.
A majority of leaders deployed by the ANC in many of our provinces are, as serial investigations confirm, also in business with the state. They receive a state pay cheque, but they also own, operate or direct private companies, many of which conduct business with the state and even with their own departments.
The research, calculations and networking that win tenders are not done at night when the children are in bed; that's all done during the day, when they should be planning the roads, pipelines and construction projects the people deserve.
So let's not only worry about what the lost money could have bought; let's also worry about the work that could have been done by those elected representatives, and state-employed officials, if they gave us the time, commitment and concentration they owe us.

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