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Restoring public confidence IN THE public sector

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A functional, ethical and skilled South African public sector is vital for positive and lasting change.

Where is the light at the end of this tunnel? When will all citizens of our beautiful country start to experience real change? These are questions I often ask myself. What then are some of the fundamental building blocks that will lift us to the next level without having to consider, for a moment, any political influence or specific agendas? Do we really understand the drivers of change that will swiftly lead us forward toward great outcomes and impressive consequences?

When we observe the current public sector environment, we struggle to find those fundamentals that are so necessary to spearhead change. Ultimately, we know that as long as we still observe service delivery protests, for example, so much must still be done to meet the aspirations of all our citizens. It is therefore fundamental that effective public administration must support those principles noted in our constitution.

To this end, public resources must be managed in ways that support economic development and enhance service delivery outcomes, which in turn support basic human rights and human dignity as defined in our constitution. For me, the real test of public administration maturity resides in the audit outcomes of government. The day we can truly acknowledge positive change will be the day the Auditor-General can issue improved or clean audit reports (unqualified, with no significant findings) across government.

It is so unfortunate that the clean audit initiative for 2014 (Operation Clean Audit 2014) will not be realised next year if the audit outcomes for 2012, as noted in the general report of the Auditor-General, are anything to go by. It paints a rather gloomy picture of the state of public administration and public finance in South Africa, I’m afraid. Notwithstanding some level of audit outcome improvement, most audits have either regressed or remained unchanged. So, what are the root cause issues that continue to play out and stifle progress?

From my perspective, there are many causes for our current dilemma, and unless we start effective programmes to improve things, it is highly unlikely that we will see the changes we hope for in the not too distant future. However, I’m confident that if we do focus on those things that matter most, and adopt a prioritised and structured approach, we can achieve great results. That being said, the will for change must be evident, and some sacrifice must be made. Progress without sacrifice will unfortunately never yield the desired results.

I personally don’t think that this is an insurmountable task to accomplish, but we firstly need to understand the current environment, and that which may just be poor attempts to advance us in the right direction. Acknowledging our shortcomings and understanding them will help us navigate the right path towards sustainable change into the future. I explore some of these issues in this article.

Leadership

Effective leadership is the cornerstone of performance excellence in any organisation, and the public sector is no exception. The accounting authority has the responsibility of ensuring the effective role out of key mandates and strategies, the proper and disciplined administration of their budgets, adequate organisational and operational risk management, the adoption of sound financial management practices, good governance and the meeting or achieving their service delivery targets.

However, we are seeing ineffective leadership as a result of:

• Incompetent senior officials filling vital leadership positions

• Key leadership roles not being filled timeously

• The lack or absence of leadership accountability, often driving the wrong behaviours from the top and compromising high performance.

Leaders must set the organisational culture in motion, along with the right tone from the top, failing which, many elements may go wrong. The effects can go viral very quickly, and may result in control breakdowns, loopholes for irregular and/ or fraudulent practices, poor financial management and administration, non-compliance with key laws and regulations, poor service delivery outcomes, non-performance issues, and ultimately, poor audit outcomes.

Skills

High-performing organisations know full well that people matter. Having the right skills means having the right people with the right competencies to execute on specific tasks matched to their skills, resulting in effectiveness.

Unfortunately, within the public sector this does not always hold true, and there are numerous reasons for this, which may include the following:

• Insufficiently skilled personnel in the job market to fill vacancies

• Poor human resource policies

• Insufficient understanding of the role or job spec requirements, resulting in mismatches

• Lack of learning and development opportunities for employees. The lack of suitably qualified personnel still remains an enormous challenge in South Africa. So, one can just imagine how the lack of skills coupled with the lack of leadership in the public sector, exacerbates the problem even further.

Corruption

Corruption, I believe, is a human condition. It is a behaviour that is prevalent the world over. It relates to an unethical human value system – a condition where the perpetrator cannot (or chooses not to) discern the wrongs in his/her behaviour, and is driven only by personal enrichment at all costs. South Africa has its fair share of this condition.

In new emerging democracies, unscrupulous business minds will try any means to secure work, especially from government. This has unfortunately become almost normalised business practice in South Africa. Why is this so? I explore some of the causes from a personal perspective. Our democracy is young and far from maturity. Opportunities are plentiful within the government or public sector as a result of large annual procurement budgets. Many private sector businesses compete for work in this sector.

The emergence of new small businesses against the backdrop of the country’s empowerment policies also creates a market place for these businesses to participate. One could perhaps argue that government, then, is its own worst enemy, creating an environment that enables fraud and corruption.

Furthermore, a continued weakened state of public administration, the lack of strong and effective leadership, as well as the lack of skills, all contribute to an environment prone to abuse and manipulation. Corruption also stems from within government itself, where personnel in positions of power and key decision makers also have interests, in different forms, in awarding tenders to private companies.

These interests range from accepting kickbacks and bribes, to beneficial direct interests in winning bid companies, consortia and joint ventures.

The cost of corruption runs into billions of rands annually.

Some of these costs can be attributed to:

• Paying much more for goods and services than market-related fair pricing

• Substandard products procured, compromising on quality and resulting in additional remedying costs

• Delaying the role out of key projects, thereby compromising on service delivery objectives

• Spending on non-prioritised items, resulting in fruitless and wasteful expenditure.

Currently, there is a lack of accountability and punishment for those who are guilty of corruption. For this reason alone, corruption will continue to rear its head in our economy, year in and year out. There is no real consequence for default, and as long as this remains the case, more and more individuals will attempt corrupt acts and fraudulent practices.

Concluding Remarks

I have touched on just three important aspects which are hindering change within the public sector. So, what must be done to move forward? I conclude with a few strategies which may help us deal with some of these burning issues, and if implemented, go a long way towards positively changing and transforming our public sector and restoring public confidence.

Notwithstanding the many positive initiatives that are underway, like the many SAICA programmes established to help government strengthen their capacity, there is so much more that must still be achieved. Now, more than ever, is the time to establish public finance professionalisation, for example. The benefits will be far reaching as it will speak to the issues of leadership and skills, and help build an accountability structure for public finance professionals.

This will greatly assist in mitigating the impact of corruption. Also, having one common agenda, and using an integrated approach with key role players who support National Treasury’s vision, as the ultimate custodian of all programmes aimed at improving public financial management and administration in South Africa, will ensure a seamless and guided solution to often transversal issues.

The public sector committee of SAICA, under my leadership, is committed to playing a significant role in this regard, which extends beyond just supporting our members in the public sector, but also aligning our mandate to the national agenda of our country and that of National Treasury. It’s time we roll up our sleeves and work together to effect the changes we want to see and to help strengthen our democracy, building a better country for all.

Author: Hadley James Francis CA(SA) is the Executive Director and founder of Redlinear (Pty) Ltd and the Chairman of SAICA Public Sector Committee.