How government burns our tax money.

HOW GOVERNMENT BURNS OUR TAX MONEY

“Corruption is worse than prostitution. The latter might endanger the morals of an individual, the former invariably endangers the morals of the entire country.” – Karl Kraus

by Rona Bekker

Numerous articles have recently been published by various media houses on the alleged R67 million spent on the salaries of employees employed at the Orsmond Tuberculosis Hospital in Kariega, a facility which has been closed to patients for almost two years.

This admission was made by the MEC for Health of the Eastern Cape, in response to a parliamentary question from the DA, where the Department acknowledged that while the hospital has had no patients for almost two years, forty-five medical employees refused to be allocated to other medical facilities in the district, despite this being agreed to by their unions.

NEASA is appalled at this flagrant abuse of the hard-earned and begrudgingly paid over (due to fear of prosecution and blatant wastefulness of government) tax money of the South African tax base. What is the most worrisome and unacceptable of this instance, is that it is but one drop in the ocean of corruption, maladministration, fruitless and wasteful expenditure, fraud and plain thievery of the South African government and state departments.

In the Auditor General’s (AG) 2022 report on material irregularities (MIs) identified across all spheres of government (national, provincial and local), the following facts were highlighted:

By 15 April 2022, the AG was dealing with 327 material irregularities, at various stages in the process. They estimate the total financial loss of these material irregularities to be R14,7 billion:

– Local Government had 185 MIs – estimated financial loss of R3.9 billion;
– Provincial Government had 82 MIs – estimated financial loss of R2.1 billion; and
– National Government had 60 MIs – estimated financial loss of R8.6 billion.

During a meeting of the Standing Committee on the Auditor General on these MIs, on 10 March 2023, the AG confirmed that there was not sufficient action taken by the other parties responsible for investigation, resolution and execution of any orders with regards to these MIs. These bodies include, but are not limited to the Hawks, all investigative authorities, the Director General and the political heads of each of the involved state departments.

Even if these billions are retrieved somehow, and the officials responsible removed from office and appropriately punished, it would but scrape the tip of South Africa’s corruption iceberg. Catching the ‘small-fries’ of corruption will not steer South Africa’s economic vessel away from the large scale, politically-enabled corruption which is threatening to sink our country.

South Africa’s most deeply entrenched and frequent corruption is not limited to irregular and fruitless expenditure by governmental departments, but by the immense self-enrichment by the high ranking officials within these entities.

One need only look at the lifestyles of our government leaders, politicians and state officials to know that our money is being funnelled directly into their own pockets. How can their salaries possibly account for their multi-storey houses, luxury vehicles, designer clothing, watches, jewels, holidays, additional homes, private school fees for their children and lavish dine-outs at South Africa’s most expensive restaurants?

What we need, what we should demand as taxpayers, is the swift and robust implementation of lifestyle audits of political- and government officials; they all need to be subjected to this anti-corruption mechanism.

In his 2018 State of the Nation Address (SONA), President Ramaphosa called for lifestyle audits of public-sector employees. Although the Department of Public Service and Administration (DoPSA) has been working on a framework for applying lifestyle audits, the practical implementation thereof has not yet manifested. A task team comprising the Presidency, the Anti-Corruption Task Team, the Financial Intelligence Centre, the Public Service Commission, South African Police Service, Auditor General, Special Investigating Unit and the South African Revenue Service were also called upon to formulate the relevant framework. However, Government constantly produces excuses for the non-implementation of this anti-corruption mechanism, the most recent being the Covid-19 pandemic, during which corruption in the public sector soared to new heights.

It seems, at this stage, that South Africa has not adopted a general statute to address illicit enrichment or classify it as a crime. This means that the majority of anti-corruption authorities, as mentioned in the paragraph above, only have mandates to conduct suspicion-based lifestyle audits triggered by circumstances warranting investigations, or upon receipt of specific complaints.
However, lifestyle audits by private auditors have been performed in South Africa before, with telling results.

In 2020, lifestyle audits were performed on some 400 senior Eskom employees, in order to determine whether these employees abused their positions to unduly benefit themselves and their families. Eskom then widened their net and investigated even more employees. This led to the discovery of 135 officials who were ‘doing business’ with Eskom, contracts which were valued in excess of R6 billion, and 5 452 employees who failed to declare their conflicts of interest.

Currently, the only manner in which large-scale, general lifestyle audits can be performed in the public service, is through the 2021 Guide drafted by the DoPSA. This Guide mandates the heads of departments or their delegated officials (i.e., ethics officers and investigators) to conduct lifestyle audits. It provides for the development of a whistle-blowing system, a single coordinated information system across all national and provincial levels and requires the head to refer allegations of corruption to the relevant enforcement agency, to investigate whether disciplinary action should be taken and if so, to institute such action.

On 1 March 2023, the Portfolio Committee for Public Service and Administration was briefed by the Public Service Commission on the efficacy of the implementation of the Financial Disclosure Framework, which is used in parallel with lifestyle audits. Its report noted the following discoveries:

• 554 Senior Management Officials (SMOs) did not disclose their interest in companies doing business with the state;
• 826 SMOs did not disclose their ownership of immoveable properties and vehicles;
• 1 409 SMOs were involved in activities that could be construed as posing potential conflicts of interest; and
• 379 SMOs were involved in Other Remunerative Work.

As we await the finalisation of the Public Service Commission Bill, and the increased implementation of lifestyle audits, we can but hope that the regulations the government had issued, will finally serve as the nooses that hang the dogs of corruption.

Dante’s Inferno and its nine levels of hell dictate that those who consciously and willingly commit fraud, barrators (corrupt politicians) are to be thrown in ditches headfirst, guarded by demons, with eternal burning flames upon the soles of their feet. NEASA couldn’t agree more.

Rona Bekker is the Policy Manager at the National Employers’ Association of South Africa (NEASA).

For more information:
NEASA Media Department
media@neasa.co.za