“Not much to go around, yet not the right hands at the till” — the 2018/19 Auditor-General (AG) local government audit report reveals that, indeed, the diminishing budget of municipalities is in hands of the wrong public servants responsible for managing the public finances required for distributing public goods and services.
The perpetual audit regression and continuous irregular expenditure have been repeatedly flagged by the Auditor-General since 2011. The AG report findings placed glaring emphasis on how R27-million allocated to build a sports complex at Metsimaholo Local Municipality was recorded as spent, yet there was only a fence and no building visible onsite. This raises grave concern about public servants’ ethos in a time of financial austerity.
This demonstrates a lack of interest in tightening internal control systems for compliance with legislation and enforcing legal sanctions. While the dire need to appoint competent and qualified officials in the budget and treasury, the supply chain, legal services and human resources directorates of municipalities remain unquestionable, the continuous deliberate subversion of legislation tells us that officials serving in these directorates are complicit and compliant in supporting corruption and patronage at local government level.
Public debates about State Capture and grand-scale corruption, implicating particularly politicians and their relationship with business, tend to overlook the significant role played by local officials in shaping and reinforcing the public service culture of clientelism. From senior- to junior-level managers in the budget and treasury directorates, these public servants can exercise bureaucratic power to execute and facilitate irregular financial transactions on behalf of the business and local political elites.
It evokes Crispian Olver’s book, How To Steal A City, in which patronage lays a precursor for corruption and financial mismanagement in municipalities. You may appoint competent and qualified accountants, but if these are complicit and compliant to the particularistic interests of political office-bearers, the public service cannot win against maladministration and corruption. In institutions where patronage is a foundation for mutually beneficial relationships, officials are in need of a politician/s for protection in order to secure a job and social mobility. In return, politicians expect support or favour from officials for economic and political ends. The mutual pursuit of economic benefits is characteristic of these patron-client relations between officials and their mayors, exco members and councillors.
On the other hand, economic relations between rogue officials in the supply chain, budget and treasury, and local business people driven by the need for private financial gain, introduces a different patron-client network. Political relations between officials with prominent political local elites in party structures outside the municipality are largely motivated by the ability to secure hierarchical political protection needed for facing legal sanctions and consolidating access to resources.
Some of these officials have political and social networks with key local party politicians who are in cahoots with business people outside the municipality. Complicit officials often enjoy political protection from local party officials, as they can facilitate irregular appointments and payments to contractors with whom they are closely associated.
Officials in the supply chain can be bought or coerced, as willing or unwilling participants, to bypass supply chain management processes by making irregular contract appointments through deviations. Budget and treasury officials can ignore compliance with the Municipal Finance Management Act 56 of (2003) by approving payments on the political instructions of political office bearers or local party officials.
Some junior officials who are not complicit in unauthorised and irregular expenditure are often intimidated and threatened with dismissals and suspensions if they do not co-operate.
It is therefore important to candidly reveal how patronage, and its cemented co-existence within the bureaucracy, has become the Achilles heel that contributes to poor financial performance outcomes.
Also, while there is greater demand from the public for accountability from political office bearers, patronage among officials can subvert the power relations and hierarchical authority relationship between political office bearers and officials. At times, officials at loggerheads with political office bearers who demand accountability may subtly challenge the authority of their political superior using their political and social connections.
Information about irregular transactions is then also used by officials as currency for bargaining their protection with implicated party officials from facing legal sanctions that may be enforced by political office bearers in the municipality.
Local political elites and local business people with particularistic interests have managed to weave a pathological web of patronage and corruption into the administration which allows officials to perpetually act with impunity. Patronage penetrates and pervades professional ethics. It can undermine bureaucratic processes and the rule of law, especially in municipalities with low local bureaucratic capacity. It reshapes or twists the legal systems of operation and compliance logics, delivering the kind of municipal financial outputs we are seeing throughout audit outcomes every year. Where these practices dominate, there can be few incentives for officials and politicians to comply with enforcing rules and legal sanctions to exercise accountability.
It is therefore important to candidly reveal how patronage, and its cemented co-existence within the bureaucracy, has become the Achilles heel that contributes to poor financial performance outcomes. This makes troubleshooting budget and treasury directorates in municipalities a mammoth task. It also draws our attention to lax procurement processes and the risks of misuse of relief resources which may be observed with audit outcomes of Covid-19 funds.
The de-patrimonialisation of the state will require decisive reform efforts. Ryan Brunette and Jonathan Klaaren have taken a bold step in making a valuable submission on the Public Procurement Bill, highlighting the importance of empowering the state and whistle-blowers to take civil action to recover damages suffered by state institutions for their failure to deliver public goods and services, due to corruption in procurement services.
However, political will is needed now more than ever to enforce public service ethics and to effect professional bureaucratic behavioural change, particularly in the budget and treasury of municipalities which have been substantially eroded by patronage. DM