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2 June 2006
1.
Background
Following
the refusal of Parliament to come before the Standing Committee on Accounts
(SCOPA), to account for the use of public funds appropriated to it from the
National Revenue Fund (NRF), the following report seeks to unpack various legal
and Constitutional provisions, which provide for accountability mechanisms of
Departments, Entities and all other institutions, which receive annual
appropriations through the NRF (Parliament included).
Section 55
of the South African Constitution, (Act 108 of 1996) states that the National
Assembly must provide for mechanisms to maintain oversight of any organ of the
state.1 Section 56 of the Constitution further
states that the National Assembly or any of its Committees may:
Of
particular relevance to the Committee is subsection (b) and (a) of section 56, particularly
subsection (b), which states clearly that any committee of the National
Assembly “may require any person or institution to report to it”. The Standing Committee on Public Accounts is
a Committee of the National Assembly and Parliament is an institution
established in terms of sections 42, 43 and 44 of the constitution. Therefore,
by virtue of the powers conferred to the Committees of the National Assembly,
Parliament as an institution, is Constitutionally obliged to appear before
SCOPA upon the Committee’s request.
3. Financial
Accountability of Parliament
In
establishing the functions of the Auditor General, section 188 of the South
African Constitution states that, the Auditor General must audit and report on
the accounts, financial statements and financial management of all national and
provincial state departments and administrations. Subsection 2 of the same
section, states clearly that the Auditor General must audit and report on
accounts, financial statements and financial management of any institution
funded from the National Revenue Fund… or any institution that is authorised in
terms of any law to receive money for a public purpose.
Subsection 3
of section 188, further states that the Auditor General must submit audit
reports to any legislature that has direct interest in the audit and to any
authority prescribed by national legislation.
Parliament
receives monies annually that are appropriated from the National Revenue Fund
and therefore is liable for audit by the Auditor General, who then tables his
report to the National Assembly.
According to
the Rules of the National Assembly, there is a Committee of Public Accounts
established under Rule 204.2
Rule 206
confers certain functions and powers to the Committee of Public Accounts.
Subsection 1, paragraph (a) of Rule 206 points out that the Committee of Public
Accounts must consider:
i.
The financial statements
of all executive organs of state and constitutional institutions when those
financial statements are tabled to Parliament.
ii.
Any audit reports issued
on those statements.
iii.
Any reports issued by
the Auditor General on the Affairs of any executive organ of state,
constitutional institution or public entity.
iv.
Any financial statements
or reports referred to the Committee in terms of the Rules.
Rule 206 further states that, the Committee may report on any of those
financial statements or reports to the National Assembly and may initiate any
investigation within its area of competence.
Subsection 2 of Rule 206, clearly states that the Speaker must refer the
financial statements and reports mentioned in paragraph (a), (i) (ii) and (iii)
to the Committee when they are submitted to Parliament, irrespective of whether
they are referred to another Committee.
This, therefore means that, the Committee has full powers to interrogate
the report of the Auditor General on Financial Statements of Parliament,
irrespective of whether or not such report has been referred to the
Parliamentary Oversight Authority. Parliament’s refusal to account to the
Standing Committee on Public Accounts is a clear disregard of Constitutional
provisions and the Rules of the National Assembly. In its refusal, Parliament
failed to take into consideration that the Standing Committee on Public
Accounts is not interested in its operations but rather interested in the
efficient and effective use of public funds that Parliament receives annually
through the National Revenue Fund.
Parliament also failed to take into account certain provisions of the
Public Finance Management Act (no.1 of 1999). Section 2 of the Public Finance
Management act points out that the object of the Act is to secure,
accountability and sound management of the revenue expenditure, assets and
liabilities of the institutions to which the Act applies.3
Section 3 subsection (1) of the Act then mentions the institutions to
which the Act applies and of particular relevance to the Committee, is
paragraph (d) which stipulates that the Act also applies to Parliament and
Provincial Legislatures subject to subsection (2) which only explains
controlling and supervisory functions of Parliament equivalent to the roles
assigned to the National Treasury in respect of National Departments.
Subsection 3 of Section 3 of the Public Finance Management Act (no.1 of
1999), further states that in the event of any inconsistency between this Act
(PFMA), and any other legislation, this Act prevails. This section should clear
any uncertainty concerning financial accountability of Parliament.
Conclusion
All the important pieces of legislation considered in the analysis above
are consistent with one another and they all imply that, Parliament, by virtue
of receiving funds through the National Revenue Fund, should account for the
use of those funds to the relevant oversight bodies established by the
Constitution. The Standing Committee on Public Accounts is Committee entrusted
with such functions. Unless, those legislative prescripts, including the
Constitution, are amended, the Standing Committee on Public Accounts must and
should, consider the financial statements of Parliament irrespective of whether
or not there is another Committee assigned with similar functions.
Sources
Constitution of the Republic of South Africa, Act 108 of 1996
Public Finance Management
Act, (no.1 of 1999)
Rules of the National
Assembly, 4th Edition January 2004
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