OVERSIGHT CHAPTER 7. Constitution section 55(2): The National Assembly. must provide for mechanisms. (a) to ensure that

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1 87 CHAPTER 7 CHAPTER 7 OVERSIGHT We are certain that if our elected representatives, in all the spheres of governance, maintain close contact with the people, they will themselves contribute significantly to the achievement of the national objective of accelerating the improvement of the quality of life of the people, by properly discharging their oversight function over the executive authorities in all spheres of government. - Address by President Mbeki to the National Council of Provinces, In systems of representative government like South Africa s, politicians elected by the people to represent them are expected to oversee the way government implements policy and spends tax revenue. The executive is accountable to elected politicians the legislature for fulfilling its responsibilities. Thus, oversight and accountability are two sides of the same coin the accountability of the executive to the legislature is enforced when the legislature exercises oversight over it and scrutinises executive action. Legislatures in the Westminster tradition have proved weak at ensuring that governments remain accountable between elections. The majority in the legislature tends to interpret its role solely as sustaining the government and supporting its initiatives. Little emphasis is placed on ensuring that the electorate receives good service from its chosen government. The task of holding government accountable is left to the opposition, which focuses on the government s weaknesses in its attempts to displace it. However, accountability and oversight are crucial aspects of the representative role of legislatures, which should not be left to opposition parties only. The need is all the more acute in a system in which one party is dominant and regular or frequent change of government is unlikely. South Africa s constitution-makers were well aware of the difficulties of holding the executive to account in parliamentary systems. For this reason, the Constitution spells out the oversight role of South Africa s legislatures very clearly. In the sections quoted in the margin, the Constitution obliges legislatures to establish systems that enable them both to ensure that government is accountable to them and to maintain oversight of government action. Constitution section 55(2): The National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of national executive authority, including the implementation of legislation; and (ii) any organ of state. Constitution section 92(2): Members of the Cabinet are accountable collectively and individually to Parliament for the exercise of their powers and the performance of their functions. Constitution section 114(2): A provincial legislature must provide for mechanisms (a) to ensure that all provincial executive organs of state in the province are accountable to it; and (b) to maintain oversight of (i) the exercise of provincial executive authority in the province including the f

2 88 OVERSIGHT f implementation of legislation; and (ii) provincial organs of state. Constitution section 133(2): Members of the Executive Council of a province are accountable collectively and individually to the legislature for the exercise of their powers and the performance of their functions. Despite these constitutional imperatives, South African legislatures have not been particularly active as overseers of government action. Procedures are generally designed to enable the legislatures to fulfil their law-making responsibility effectively and MPs and MPLs understand this responsibility. But procedures for holding the government accountable are less well established and the interviews conducted for the Legislative Landscape Study suggested that politicians have a much poorer understanding of oversight than of their law-making responsibility. There is also little agreement among members as to what oversight means in practice and how it should be carried out. UNDERSTANDING OVERSIGHT Many politicians use the term oversight very broadly, to cover both their role in scrutinising bills presented to them by the executive as well as their obligation to hold the executive accountable for the implementation of legislation and policy. This broad interpretation of oversight is, of course, legitimate but, in practice, it means that the emphasis in conducting oversight tends to fall on the phase in WHAT DO WE UNDERSTAND BY THE TERM ACCOUNTABLE? Accountability is an obligation to answer for the execution of one s assigned responsibilities. Political accountability is required by the Constitution. Four elements are necessary for accountability to work: > Persons who have the power to make decisions and to put them into effect. > Objectives or standards that are to be attained by those persons. > An authority to whom the decision-maker is answerable. > Some means of calling those responsible for decisions to account. An obligation to answer, to give an account of action taken, is the central core of the concept of accountability. which legislation is being passed. Less attention is paid to evaluating the way in which policy and laws are implemented. In short, many politicians consider their oversight responsibility to be effectively carried out although they pay almost no attention to the functioning of the executive or the success (or failure) of laws and policies. In addition, most politicians do not view oversight as an ongoing responsibility. As a result, members and committees tend to be reactive rather than pro-active in their oversight role. Equally seriously, members of the national cabinet and MECs often do not understand or support the oversight responsibility of the legislatures. The absence of a common understanding of the oversight responsibility of legislatures amongst legislators and members of executives is particularly problematic because, in conducting oversight, legislatures are easily perceived to be undermining the authority of the executive rather than contributing to a richer and more open, transparent and democratic process of government. In addition, there is a lack of clarity about the role of members of the governing party in overseeing executive action. The constitutional obligation to hold the government accountable is complicated by the loyalty demanded by the party system. Some people regard oversight solely as a challenge to the ruling party and some members of the ruling party are not certain that oversight is their responsibility. However, the Legislative Landscape Study interviews also showed that there are

3 OVERSIGHT 89 majority party MPs and MPLs who understand clearly that the role of legislators in conducting oversight is to ensure that government policies are properly and efficiently implemented, that government departments run smoothly and that the law is upheld. To these respondents, oversight is exercised in the interests of society in general and is not appropriately left to the opposition. Finally, there is confusion about oversight powers and appropriate oversight processes. In many legislatures, it is the departmental accounting officer and other officials who the politicians seek to hold accountable, rather than the responsible Minister or MEC. This misunderstanding is widespread and undermines the ability of the legislature to ensure proper political accountability. It appears to stem from a misreading of the Public Finance Management Act 1 of Certainly, the Act spells out the responsibilities of accounting officers. In effect it contains important elements of the employment contract of the accounting officer. But the Act does not (and could not) make the accounting officer directly accountable to a legislature. First, the Act cannot vary the allocation of powers and responsibility found in the Constitution. The constitutional position is that legislatures are responsible for overseeing the executive and it is members of the executive, in turn, who must hold their officials to account. Secondly, to suggest that the accounting officer is accountable to the legislature in a way that absolves the Minister or MEC of responsibility is absurd. The legislature can, if it so wishes, scrutinise the way in which an accounting officer fulfils his or her functions but it relies on the Minister to ensure that remedial action is taken when all is not well. It is the responsible Minister (or MEC) who has the power to discipline CHAPTER 7 CHAIN OF ACCOUNTABILITY Confer authority on Confer authority on Establish and appoint VOTERS PARLIAMENT PRESIDENT / PREMIER AND CABINET Is accountable to Are accountable to Account to Departments and Heads of Departments (or fire) an accounting officer. Thus, although the Public Finance Management Act spells out that accounting officers are legally liable for financial mismanagement, it is the Minister who has the obligation to hold them liable. The mistake is to confuse the legal responsibility that the accounting officer has to ensure sound financial management in the department (as a civil servant on contract with the government) with the political (and constitutional) accountability of the Minister or MEC for the way in which the department is run. Under the model of accountability established by the South African Constitution, politicians correctly seek information from departmental officials. However, it is the Minister or MEC who is responsible for ensuring that problems are resolved. This should not be interpreted to suggest that the Minister (or MEC) must be held personally responsible for all mismanagement in his or her department. But the Minister is responsible for ensuring that proper mechanisms are in place to identify and rectify problems and for ensuring compliance with legislation, such as the Public Finance Management Act. Thus, a Minister or MEC

4 CHAPTER 7 90 OVERSIGHT needs to take action against ineffective officials and if this is not done, members of the legislature can demand an explanation. Linked to the confusion about whom a legislature can hold to account is confusion about how accountability can be enforced. In the Legislative Landscape Study few interviewees knew that they could and may even have a responsibility to demand the presence of a Minister or an MEC in a legislative committee. No MPL interviewed was sure of what powers they had when oversight processes uncovered bad practices. Parliament is aware of the problems in fulfilling its oversight obligations. This is reflected in the fact that, in 1999, it commissioned two substantial studies on There should be an unqualified principle that a minister is accountable for everything which happens (or does not happen) in his or her department, in the sense that he or she owes a duty to parliament and the public for departmental policies, for what has taken place in the department or its agencies, and for the conduct of officials. - Rodney Brazier to the British House of Commons Public Service Committee 1994 quoted in Claude Senay and Dirk Besdziek 1999 Enhancing Oversight in South Africa s Provinces: Institutions and Concerns, African Security Review 8(2):15. oversight and the NCOP undertook one in conjunction with an NGO. 2 A letter from Dr Frene Ginwala, the Speaker of the National Assembly, to the Deputy President, Jacob Zuma, in 2001, confirms that Parliament is alert to the problems. In the context of controversy over the respective roles of the executive and Parliament, provoked by the report of the Standing Committee on Public Accounts on the arms deal, Ginwala writes: We are still all developing our understanding and trying to give effect to the constitutional relationship between the Executive and the Legislature.... we need to continuously review and improve the communication and relationship between the Executive and the Legislature. 3 The 1999 Report on Parliamentary Oversight and Accountability covered a wide range of issues and, perhaps inevitably, has been controversial. The main concerns that politicians raise about it seem to relate to the fact that it does not analyse the South African parliamentary system in the light of its attempts to move away from its Westminster-based heritage. Nor does it explore the specific problems faced by a legislature in an emerging democracy in which there is an urgent need for massive social transformation and in which one party is dominant. Nevertheless, politicians interviewed in the Legislative Landscape Study share its diagnosis of the main problems. It points to a lack of understanding of oversight amongst legislators and between members of the legislature and the executive and to a resulting inadequacy in procedures for oversight. Its main recommendation is for an Accountability Standards Act to be passed, which would clarify the oversight responsibility and set out procedures for its effective implementation. No action has been taken as a direct result of the 1999 reports and fundamental problems in understanding oversight remain but oversight practices are developing. The following sections discuss the tools that legislatures use to conduct oversight and describe some innovations.

5 OVERSIGHT 91 IMPLEMENTING OVERSIGHT: TOOLS AND PRACTICES For a legislature to fulfil its constitutional obligation to hold the executive properly accountable, oversight practices must be thoroughly integrated in its work. Increasing resources (like appointing more researchers) is important but not adequate. The political and administrative environment must support good oversight practices procedures must be backed up by a commitment to make oversight work. The Constitution s insistence on proper committee systems in South African legislatures provides a good start to building institutions with the capacity to carry out their oversight responsibility. Committees play the major role in oversight in most legislatures. They have the capacity to deal with detailed reports and can request that members of the executive and public servants provide them with the necessary information. Their multi-party nature also enhances their ability to conduct oversight. Nevertheless, the role of committees in conducting oversight is not without problems. First, as we discuss in chapter 5, the rapid development of committees in South African legislatures has often been at the cost of the distinctive role of plenary sessions. South African legislatures have not paid much attention to the role of plenary sessions in the oversight process. Question time is an obvious opportunity for oversight. Although it is a vehicle for party-political debate, it also allows politicians to bring specific concerns of their constituencies to the attention of members of the executive. And, as suggested in chapter 5, plenary sessions could also provide an opportunity to discuss committee reports in a more public forum. Most importantly, more publicity can be given to plenary sessions and they need to be used to showcase and scrutinise the implementation of policy. The primary focus of committees as they conduct oversight should be a practical one they should address the mechanics of implementation of policy, not the development of policy. Committees are well suited to focusing on the technical aspects of programme implementation, such as: Were services provided? Was the number of services actually provided the same as proposed in the budget? Did the right people receive the services? By doing this, they can objectively establish a commonly understood set of facts about the status of implementation. Once all parties understand the factual situation, a policy debate, in which various values and interests are brought forward, can proceed in a more informed fashion. This debate should take place in the plenary. A second problem linked to the oversight role of committees, as politicians themselves acknowledge, is that the record of committees in conducting oversight is patchy. For instance, although the interviews conducted for the Legislative Landscape Study suggested that, in general, MPs and MPLs feel that their oversight function is carried out successfully, successes noted are generally limited to the stage of scrutinising bills during the committee stage of the legislative process. Moreover, when encouraged to discuss the roles of particular committees, some politicians are less content. In one province, it was suggested that the Public Accounts Committee did a good job but that the oversight processes in other committees were very partisan and that decisions tended merely to confirm party positions. Many minority party MPLs suggested that government party members in the province protected their MECs. This, they sug- CHAPTER 7

6 CHAPTER 7 92 OVERSIGHT gested, was reflected in the fact that answers to questions in the House tended to fall short of expectations, that MECs were seldom brought to account, and that committee members themselves were reluctant to call MECs to answer questions in the committees. On the other hand, in one province all the respondents to the Legislative Landscape Study questionnaire were satisfied with the answers they received from MECs to questions asked in committee. Some MECs are as dissatisfied as MPLs and MPs with the process. 4 In interviews they noted that committees appear unprepared when reports are presented and that debates tend to be shallow because members raise non-contentious issues. Members rush through reports without asking substantive questions (such as the relationship between plans and deliverables). Thus, in some cases at least, MPLs are mistaken if they interpret their role as always requiring them to defend (or even protect) MECs from their party. These MECs would welcome the opportunity to defend their policies in public and to work with legislative committees that are bolder and more informed. Under these circumstances, a better, shared understanding of the respective roles of the executive and the legislature would improve legislative oversight practices. Committees and plenary sessions should complement each other in the oversight process. In addition, certain key practices drive (or should drive) the oversight process in most legislatures. These are discussed below. They are > Question time > Special plenary debates > The consideration of committee reports in the plenary > The annual budget process > Scrutiny of departmental reports QUESTION TIME Question time, during which members of the legislature have an opportunity to question members of the executive, is often seen as a key element of a system of oversight. The format (usually short questions and short answers) and the timing (relatively short notice of questions is required) potentially provide an attention-catching opportunity for politicians to challenge and defend the government s record. However, it leaves little room for substantive debate on the implementation of government policies and seems mostly geared towards the articulation of partisan views. After all, question time is a public event providing an opportunity to engage in party-political competition. Perhaps this is the reason members of the opposition rather than the government have used question time almost exclusively in the National Assembly (see table below). This indicates a narrow interpretation of oversight in which it is the specific task of the opposition to hold government accountable. QUESTIONS IN THE NATIONAL ASSEMBLY QUESTIONS IN THE NCOP ORAL REPLY WRITTEN REPLY

7 OVERSIGHT 93 The highly partisan nature of question time is inevitable and, in fact, politically healthy as long as it does not render questioning meaningless as an instrument for accountability. To prevent this, government MPs should be given incentives to ask meaningful questions, for example addressing matters that concern their constituencies. The option of allowing MPs from the same or different parties to ask questions jointly could also be considered. Especially now that question time is allocated to parties in proportion to their strengths in the National Assembly, the opportunity to ask joint questions might help prevent overwhelming party control. A joint effort would enhance the weight of a question, especially if it is a multi-party effort, and thus enhance its effect in terms of accountability. CHAPTER 7 NUMBER OF QUESTIONS (FOR ORAL AND WRITTEN REPLY) ASKED IN 1999, BY PARTY* PARTY NUMBER OF QUESTIONS DP 879 NNP 609 IFP 182 ANC 111 UDM 51 FF 48 ACDP 37 PAC 28 MF 6 UCDP 2 AZAPO 2 Total 1955 *Taken from Annual Report of Parliament 1999 (Party breakdown of questions in 2000 is not available) Question time does not serve as a mechanism for party-political competition only. It also has an information-seeking aim. This is especially important as legislatures seek to fulfil their oversight responsibilities and so-called written questions are most effective here. It has been said that if MPs know the answer to a question they table it for oral reply; if they don t, they request a written reply. This points to the different nature of the two types of questions. Questions for written and oral reply nevertheless share a similar problem: the danger of not UNANSWERED QUESTIONS IN 2000 In the National Assembly, 43 questions for oral reply and 227 questions for written reply were not answered. A total of 303 questions for written reply were transferred for oral reply. (This occurs if questions for written reply are not responded to.) In the NCOP, 27 questions for written reply were not answered, whilst 16 questions for written reply were transferred for oral reply. Almost all questions for oral reply were answered. being answered. Ultimately, it is a political matter whether unanswered questions are tolerated. However, the way question time is managed and planned may reduce the problem of Ministers or the President failing to attend question time. Clear guidelines on the admissibility of questions (which might limit those which require extensive use of government resources to be answered) would also

8 CHAPTER 7 94 OVERSIGHT help build executive support for parliamentary questioning. What is the role of questioning in the NCOP? Very few questions are asked in the NCOP. In 2000, only 54 questions were put for oral reply and 187 for written reply. The underlying problem seems to be a lack of clarity about what questions are appropriate to ask in the NCOP. Two questions arise: (i) to what extent should questions in the NCOP focus on provincial interests and (ii) what constitutes a provincial interest? The Constitution answers the first question. Questions should focus exclusively on provincial interests because, in the words of section 42(4), the NCOP represents the provinces to ensure that provincial interests are taken into account in the national sphere of government. It does this mainly by... providing a national forum for public consideration of issues affecting the provinces. But this provision leaves open the difficult question of what a provincial interest is. This question needs to be answered in the context of the distinct roles of the National Assembly and the NCOP. Clearly, a duplication of roles is not intended. This INTRODUCTION OF NEW SYSTEM OF QUESTIONS During 2000, the questioning procedure in the National Assembly was reviewed following proposals made by the ANC and discussed at a number of meetings of the Chief Whips Forum. Some of the reasons given by the ANC for the proposals were: > Interpellations were not seen as an effective form of interaction between Ministers and members > There was insufficient time to answer the large number of oral questions on the Question Paper each week > The first come, first serve basis of tabling questions did not always allow for a fair spread of the opportunity to ask questions among all parties. New guidelines on questions in the National Assembly were agreed upon. The new procedure ran over a trial period from 5 April to 23 June The trial period has subsequently been extended several times with only minor changes to the new system. Under the new system, interpellations have been abolished and question time has become party-based and not memberbased as in the past. The order of questions is determined on the same basis as motions in the House. Parties are also able to prioritise their questions. Ministers portfolios are grouped in clusters, with a different cluster being the subject of question time each week. Provision has also been made for urgent questions and questions to the President on a quarterly basis. The ministerial quota of four questions per department has been increased to eight. Members are allowed to ask five supplementary questions and express an opinion. Questions to the Deputy President are scheduled for every second week. It is too early to draw definite conclusions about the effect of the changes to question time. However, one of the motivations for the ANC proposal was to encourage government MPs to use question time. In assessing the success of this change, attention will have to be paid to the type of question asked. If the new process is intended to encourage government MPs to fulfil their oversight role, questions will need to be directed to issues of policy implementation (for instance by dealing with problem areas raised in constituency work or in oversight processes in committees). A preponderance of sweetheart questions, explicitly designed to elicit good news from government Ministers, would suggest that the system is not working. means, for example, that matters relating to defence (which is an exclusively national responsibility) would usually not be appropriately discussed in the NCOP. But it is possible that a defence issue such as the siting of a military base, could affect one province disproportionately. Under these circumstances, the NCOP would offer an important (and perhaps the only) forum in which to question the Minister of Defence on the policy and to discuss its specific implications for the province.

9 OVERSIGHT 95 Issues over which provinces and the national government have concurrent responsibility would usually be matters of provincial interest. And question time in the NCOP gives both provincial and national Ministers an opportunity to debate these matters more openly than in the executive-driven MinMECs (meetings of MECs and the national Minister) where most intergovernmental discussions take place. Provinces need to consider how to use question time in the NCOP. At the moment, questions are left to permanent delegates. But provincial legislatures may have specific matters that should be raised and they could request their permanent delegates to do this. CHAPTER 7 Question time in the provinces Some of the provinces do use question time as an opportunity for oversight with varying degrees of success. Question time occurs regularly and is well attended. (In none of the provinces asked is time allocated to parties proportionate to representation as it is at national level.) In Gauteng, question time occurs every time the legislature sits. In the Western Cape, records are kept and bound. In Mpumalanga, questions are posed by the opposition to the MEC for written reply on a daily basis. If the MEC does not reply, he or she is called to give an oral reply. Nevertheless, this is often not effective because the MEC delays in providing answers. This problem seems widespread. The Eastern Cape Legislature Annual Report indicates that provincial executives may not always fulfil obligations to answer questions as quickly as they should: Responses to written questions have improved considerably. Only 100 are outstanding for the period 1 April 31 December 1999 while 81 are outstanding for the period 1 January 31 March This is out of a total of 437 questions. SPECIAL DEBATES IN THE PLENARY Legislatures should ensure that important matters are discussed at an early stage in the legislature rather than being fully aired in press conferences before MPs and MPLs consider them. Thus special debates in plenary sessions can be used to enhance the oversight function of legislatures. But timing can be difficult, particularly in the provinces. In Mpumalanga, for instance, the House sits once every two weeks only. Even when legislatures sit more frequently, few have effective procedures for urgent discussions. When they do, politicians may not have the confidence to use them, as they are reluctant to be seen to challenge the majority party. In addition, procedures to request a special debate are not always clear and multiple avenues for placing an urgent or current issue on the agenda seem to overlap. Members can request an urgent or snap debate about a matter of importance but most legislatures also have a procedure for interpellations. The latter tend to be drawn-out and rigid question-and-answer sessions rather than snappy mini-debates about a pressing issue. This is why the National Assembly decided to abolish them. However, the important point here is that, regardless of the procedural details, the opportunity for members to put a pressing issue on the agenda for plenary debate is crucial for the oversight responsibility of legislatures. It should therefore not entirely depend on the support of the majority party, nor be

10 CHAPTER 7 96 OVERSIGHT regarded as a concern of the opposition only. TAKING COMMITTEE REPORTS SERIOUSLY In chapter 5 we argue that in a system in which committees routinely report back to the plenary, oversight would be enhanced and the values of democratic governance would be better met. However, practices vary. In the National Assembly, committees indicate whether or not action should be taken on their reports to the full House. However, in most cases even those reports identified as needing attention are not discussed they are simply adopted by means of a resolution. It is in very rare cases only that reports are discussed in plenary. In some provinces (for instance the Western Cape) a committee will report back to the plenary only if it wishes to investigate something. In other provinces (such as Mpumalanga) although committees are required to report back to the plenary after considering departmental reports, this does not happen in practice. Generally, members feel that the work done in party caucuses and committees need not be repeated. Plenary sessions are not regarded as adding anything substantial because party positions are unlikely to change after decisions have been taken in the caucuses where members of the executive participate. However, unless members of the legislature start to claim recognition for their separate oversight responsibility and a degree of independence with regard to the findings of committee reports, debates in plenary will not fulfil the important role of developing a democratic culture of open discussion and appraisal of performance. Nor will legislatures fulfil their oversight responsibility properly. MPs and MPLs themselves must recognize the importance of publicly explaining the positions they take and the work they do in committee meetings. THE ANNUAL BUDGET It could be said that the power of legislatures to amend the budget submitted to them by the executive is a measure of their overall power. Historically, in systems based on the Westminster model, executives have been jealous of their right to determine the budget and reluctant to allow members of the legislature to The Budget is the most important economic policy tool of the Government and provides a comprehensive statement of the nation s priorities. As the representative of the people, Parliament is the appropriate place to ensure that the Budget best matches the nation s needs with available resources.... The international debate is framed as a tension between the roles of the executive and the legislature between technicality and democracy. In virtually all countries it is accepted that the executive has a mandate to prepare the Budget, as it possesses the most comprehensive information on which to base revenue and expenditure decisions. [In South Africa,] as in many other countries, this is recognised in section 55(1)(b) of the final Constitution that gives the executive the sole right to initiate and prepare money bills. The role of the legislature is to exercise oversight and to authorise the executive to raise revenue and spend money. The basic dilemma between technicality and democracy has led to a compromise whereby most Parliaments have restricted their powers over the Budget. In return, most were able to maintain their sovereignty by keeping a closer watch over Budget execution, thereby strengthening the capacity to make informed amendments. Every system will have to balance this tension through the design of the process and its rules. Warren Krafchik and Joachim Wehner The Role of Parliament in the Budgetary Process (1998) 66 South African Journal of Economics 512

11 OVERSIGHT 97 interfere with their assessment of spending needs by amending the budget. Sections 77(2) and 120(2) of the South African Constitution reflect a determination that South Africa s legislatures should not be subordinated to the executive in this way. Rather than leaving provisions concerning the amendment of money bills (which include the annual appropriation bills and tax legislation) to the Rules of each legislature, the Constitution insists that legislatures must set out amendment procedures in an Act. This means both that a greater level of publicity will accompany the development of a procedure to amend money bills than accompanies mere changes to Rules and that the procedures cannot be changed by a simple resolution of the House. No legislature in the country has passed the legislation required by these sections yet. This is a reflection both of the delicate balance of power between the legislature and the executive that the legislation must capture and the high stakes that both legislatures and executives attach to the issue. Money bills and particularly the bundle of bills that make up the annual budget encapsulate the government s policy agenda in a more concrete way than any other piece of legislation. This is why scrutiny of the budget is considered a key aspect of the oversight function of legislatures. Despite the absence of the section 77 and 120 legislation, each legislature carries out a review of the relevant annual budget before it is passed. Occasionally amendments are made after discussion with the Minister (or MEC) of Finance. 6 But, the absence of a clear framework for amendment may leave legislatures with a stark choice: either to reject the budget in total or to approve it without changes. This vacuum means that an opportunity for constructive legislative oversight is wasted. An Act with clear and prudent amendment rules is needed. How successful is the review of the budget that members undertake? MPs and MPLs probably agree that South African legislatures still have far to go in this regard. One of the problems that concern members is the fact that, in effect, the budget is approved after it has been implemented. Budget Day in South Africa, when the bundle of bills that represent the national budget is presented to Parliament, is usually in the third or fourth week of February. The new financial year starts in April. This means that spending has started by the time members meet to discuss budget allocations. Certainly, changes are still possible and do occur but the timing of the budget means that members often feel that they are being asked to react to something that is already decided. Changing this system would require major adjustments in the Treasury but many people feel that it is necessary to provide members (and the public) with a real opportunity to respond to budget proposals. Although scrutiny of the budget is a critical aspect of the oversight responsibility of legislatures, there are now other ways in which they can engage in the budget process. In the past the annual budget was a deadly secret until Budget Day. On Budget Day the attention of the country would be fixed on the Finance Minister when he unveiled the new budget (and new taxes). Budget Day still draws the attention of the public and the press but much of what is presented is not new. Instead, under the Medium-Term Expenditure Framework, which sets out a three-year budget policy, most budget proposals are well known in advance. Under this system, legislatures have an opportunity to engage with budget policy Constitution section 77(2): An Act of Parliament must provide for a procedure to amend money Bills before Parliament. Constitution section 120(2): A provincial Act must provide for a procedure by which the province s legislature may amend a money Bill.

12 CHAPTER 7 98 OVERSIGHT long in advance and at a stage at which they can have real influence on longterm decisions and financial commitments. The situation in provinces as far as the timing of annual budget debates is concerned is even more complicated than in the national sphere. Despite the increasing certainty in budgeting that has been introduced by the national Treasury s Medium-Term Expenditure Framework, provincial budget decisions are in fact contingent on agreement by the national Parliament on the allocation to each province. This is determined by the annual Division of Revenue Act, which (under the Intergovernmental Fiscal Relations Act) is introduced in the National The Medium-Term Budget Policy Statement (MTBPS) is a statement, made annually by the Treasury, which encapsulates the policy framework for the annual budget. It provides a summary of the macroeconomic context within which the budget is prepared, it sets out the priorities, objectives and goals for the budget and it gives three-year projections of resources available to meet Government s policy objectives (Ministry of Finance Medium-Term Budget Policy Statement 1998 p 9). In 2001 an ad hoc Budget Committee was established to consider the MTBPS. Focused attention should be paid to the MTBPS but should the task be allocated to an ad hoc committee? Comparative experience suggests not. Ad hoc committees do not build up expertise and members do not have any incentive to consider their membership of the committee to be a valuable contribution to their careers. Poor experience with the ad hoc finance committee established in the British House of Commons to deal with aspects of tax legislation provides an example. Generally, where legislatures have engaged properly with the budget it has been through strong, well-resourced committees. Sweden and Germany provide good examples here. Assembly as part of the annual budget. The draft Division of Revenue Bill for 2002 was published in December This constitutes a significant improvement on previous years, when budget proposals became known much later, but problems remain. The Treasury says that although it may be ideal to publish the draft bill with the Medium-Term Budget Policy Statement (MTBPS) in October, earlier publication would lead to less precise forecasts as the budget is influenced by variations in the exchange rate, for instance. However, by the time the 2002 draft was published, legislatures were in recess and, as members return only towards the end of January, valuable time was lost. This may mean that legislatures need to consider ways of initiating discussion on the budget over the yearend. 7 Other concerns about the scope that members have to use the budget process as an effective oversight tool relate to procedures in the legislatures and to resources. In the National Assembly members are concerned about a lack of time for the Budget Debate. They point to the fact that less time is allocated to the debate than in 1994 and 1995 and argue that if the function is to be taken seriously, more time is needed. Time needs to be allocated both to thorough discussion in committees and to debate about policy principles in plenary. Because the plenary will focus on general policy issues and political choices, the greatest impact the legislature is likely to have on the budget is on the detail discussed in committees. This suggests that a time bias towards committees is desirable. A yet more serious concern is that often members do not have the capacity to scrutinize budget proposals. This problem cannot simply be attributed to the complexity of the budget. One governing party MP commented that although the parliamentary system imposes inherent limitations on what can be done by Parliament in relation to the budget, currently oversight of the budget in

13 OVERSIGHT 99 Parliament is totally inadequate: Committees don t know what the departments are doing or what they are meant to be doing. They are not familiar with the policies and don t know the budgets. Before a committee can have hearings, it needs to get to grips with what it is that the department is meant to be doing. CHAPTER 7 In other words, proper scrutiny of the budget requires an understanding of the substantive issues with which the department is concerned and knowledge of how to translate the budget documents in policy terms. Many members do not have these skills. THE PUBLIC FINANCE MANAGEMENT ACT AND LEGISLATIVE SCRUTINY OF THE BUDGET > The national and provincial annual budgets must be accompanied by measurable objectives for each main division within a department s vote (PFMA section 27(4)). This ensures that the link between policy and budgets is clearer. > The national Treasury must report monthly on revenue and expenditure; provincial treasuries must report quarterly (PFMA section 32). Portfolio committees could use these monthly expenditure updates to monitor budget implementation. > Virement or the shifting of money appropriated for one programme to another programme may take place under strictly controlled conditions only (PFMA section 43). This means that legislatures vote on programmes, rather than on the full departmental budget. Usually money approved by the legislature for one programme cannot be moved to another. The gradual implementation of the Public Finance Management Act should improve the accessibility of budget proposals since it demands more transparent information in budgets. At present, budgets and supporting documents are not very helpful in laying out policy directions, performance targets or ways of measuring results. The Department of the Public Service and Administration and the National Treasury have begun developing annual reporting formats to encourage departments to include more performance data in their reports. Gauteng s budget presentation has been completely revised to include performance targets. However, the format of budgets and reports cannot make up for a lack of knowledge of the substantive policy issues. MPs and MPLs need to be familiar with the policy a budget seeks to implement if they are to assess the budget in a meaningful way. Part of the solution lies in the hands of the legislators. They need to insist upon clear, continuous and measurable data from the executive. Secondly, members can monitor government performance in particular areas over time. Until they do this, each budget will be considered as a totally new start. In fact, in all but exceptional circumstances, each budget builds on its predecessor. Members need to bring the understanding USING THE BUDGET SPEECH AS AN OVERSIGHT TOOL In the Eastern Cape, each committee measures departmental reports against the budget speech made by the MEC. The MEC appears before the committee and additional documents may be called for. On the basis of what is heard, a report containing findings and recommendations is prepared by the committee clerk and is adopted by the committee. This report is then presented to the legislature and is debated in the presence of the MEC. Anyone may ask questions of the committee chair and the MEC. The committee report is then either adopted or rejected by the House. According to a special rule, recommendations that have been adopted are sent to the MEC with an instruction to report within 30 days. If the MEC fails to do this, he or she is called before the committee.

14 100 OVERSIGHT Constitution section 92(3): Members of the Cabinet must (b) provide Parliament with full and regular reports concerning matters under their control. Constitution section 133(3): Members of the Executive Council of a province must (b) provide the legislature with full and regular reports concerning matters under their control. of the implementation of policy that they acquire over the years to their scrutiny of new budget proposals. A core of experienced members, stable committee membership and good research support are critical for this. As the committee systems in South African legislatures mature, and as turnover of MPs and MPLs declines, members will be able to develop expertise. DEPARTMENTAL REPORTS The Constitution clearly intends departmental reports to assist oversight. Regular, constitutionally mandated reports allow MPs and MPLs to keep track of departmental activities. But, the 1999 Report on Parliamentary Oversight and Accountability identified several problems that national parliamentary committees have in dealing with these reports. There is a logistical problem with an overload of reports and late distribution leaving too little time to prepare responses. The wide range of bodies accountable and reporting to Parliament stretches resources even further. As a result, many reports are simply ignored rather than used to hold the executive accountable. Some committee members apparently rely on the more infrequent briefings with the department rather than available written reports to raise matters that are of importance. The proposed solution is streamlining the procedure on receipt of reports. However, as mentioned in the introduction to this section, improved procedures alone will not guarantee effective oversight. The legislative environment and members themselves must be geared to oversight. A number of provinces have taken steps towards institutionalising oversight by asking departments to submit regular reports. Generally, however, provincial legislative committees operate without a plan for conducting oversight and considering reports. Reports are requested on an ad hoc basis if something comes up and the approach is reactive rather than pro-active. In one province, the coordinator and chair of a committee watch the newspapers for indications as to when they should take up an issue. The absence of methods of verifying departmental reports also weakens their usefulness in the oversight process. Without verified information legislatures are heavily if not entirely dependent on reports compiled by the very departments over which oversight is being exercised. Wealthy legislatures, such as those in the United States, can call on legislative research teams to verify some of the material that is presented to them by government. They also schedule research projects at predetermined stages in the implementation of new policies. This helps to ensure that implementation of the policy is on track and prevents unintended consequences. South African legislatures, like their counterparts in many Commonwealth countries, are unlikely to have this level of research support in the near future. To compensate, committees need to draw creatively on available resources for independent verification. Sometimes NGOs will be able to fulfil some requirements, especially when the input is diverse and from various perspectives. It has been suggested in one legislature that selected NGOs be kept on a retainer and asked to provide the legislature with specified information that can be used as an external performance monitor on an ongoing basis. The South African Human Rights Commission should also be able to supply relevant information because its constitutional mandate includes an obligation to report

15 OVERSIGHT 101 THE NCOP S OVERSIGHT MANDATE A 1999 report on the oversight role of the NCOP, Speeding Transformation: NCOP s role in the oversight process,* was written after an extensive series of interviews with politicians in the national Parliament and provincial legislatures. One of its objectives was to analyse the oversight role of the NCOP. The interviews conducted for the Landscape project suggested that the findings of the 1999 report remain valid and so its main findings are summarised here. The Constitution gives the National Assembly the central role in oversight of the national executive. The NCOP s oversight role complements the role of the National Assembly because it is focused on the relationship between the spheres of government. In this sense the oversight role of the NCOP is narrow. Accordingly the oversight role of the NCOP should not duplicate that of the National Assembly or the provincial legislatures. THREE TYPES OF OVERSIGHT THE NCOP HAS RESPONSIBILITY FOR THREE TYPES OF OVERSIGHT: 1/ AN INHERENT OVERSIGHT ROLE: It has an inherent oversight role, which flows from its role in the passage of legislation and its role as representative of the provinces and local government. This includes four main functions: > OVERSIGHT OF THE BUDGET Because the NCOP s specific constitutional role is to represent provinces and local government in the national sphere of government, its main concern in relation to the budget must be with the equitable division of revenue amongst the three spheres of government and the subsequent horizontal division amongst the provinces, as well as any conditional grants to provinces. The NCOP s role in overseeing the budget is to ensure that provincial and municipal interests are properly accommodated in the budget and that the division is equitable. To do this it will have to review past divisions of revenue, consider Financial and Fiscal Commission recommendations, and draw on the experience of provinces in fulfilling their statutory mandates. > OVERSIGHT DURING THE LAW-MAKING PROCESS The NCOP s major constitutional responsibility is to participate in the passage of section 76 laws. The practical rationale for this constitutional obligation is that, generally speaking, provinces will implement section 76 laws. It is essential, then, that provinces use their role in the NCOP to ensure that these laws are appropriate and responsive to the capacity of the province and the needs of their constituents. When the NCOP passes legislation it should also ensure that the legislation facilitates future oversight. For Parliament to oversee the implementation of legislation effectively, the legislation itself must contain clearly stated goals and objectives. In addition, bills should contain reporting requirements that will assist effective oversight. In summary, when passing legislation, the NCOP should ask: Does this bill contain adequate provisions to ensure that its implementation can be monitored on an ongoing basis, and its effectiveness properly measured? > OVERSIGHT OF THE IMPLEMENTATION OF LEGISLATION MONITORING PROGRESS IN IMPLEMENTATION A fundamental part of oversight is to assess whether the implementation of laws and the expenditure of funds achieve the goals intended by Parliament when it passed the laws. The NCOP oversight role is to draw on provincial experience with national policy and inform the national government of issues that affect implementation. The NCOP can be a forum for provincial participation in several ways, including: E Providing a provincial perspective on the implementation of national policy and legislation. E Reporting on crosscutting issues that affect several or all provinces, including issues of capacity to implement national programmes, common provincial institutional needs, such as improved training in financial or computer systems, and common factors that hinder successful implementation of national policies. E Co-ordinating the exchange of information on issues of common concern among provinces (i.e. helping to establish best practices). This will improve the capacity of provinces to fulfil their responsibilities (i.e. helping to establish best practices). > OVERSIGHT OF THE IMPLEMENTATION OF LEGISLATION DELEGATED LEGISLATION The NCOP has two distinct roles in the oversight of delegated legislation. First, it must use its inherent oversight power to review delegated legislation for compliance with constitutional standards. Secondly, under section 146 of the Constitution, if