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Treasury aims to tighten finance rules

Oct 26 2011 16:40 Sapa

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Cape Town - The Treasury is mulling changes to public finance legislation to enforce political accountability and tougher penalties for transgressions, Finance Minister Pravin Gordhan said on Wednesday.

"We are certainly looking at amendments to the PFMA (Public Finance Management Act)," he told a joint sitting of parliament's committees on appropriations and finance.

"(These) will lay greater accountability at the door of officials and politicians who might make some of these decisions, and where some of these things reach gross levels we believe we may need greater sanctions than we have at the moment."

Gordhan said there was a need for a culture change in government spending and for stronger leadership from politicians and senior civil servants to curb waste and promote "moderation and modesty".

Officials to account

He also called on parliament to do more to hold officials to account.

"We need leadership from politicians, we need leadership from directors general, leadership from senior civil servants, and we need a recognition we could do better with our own money if we do the right things," he said.

"All of us need to, particularly from parliament's side, put a lot more pressure on civil servants and (have) the accounting officers accounting a lot more for what they do and what they don't do."

Accountant general Freeman Nomvalo told reporters the provisions of the PFMA were largely adequate but needed to be better enforced and aligned with other laws governing public administration.

"You need a culture change in government rather than much amendment to the PFMA," he said.

"But you will find that there are also other pieces of legislation, for example when you think about issues of fraud and corruption, that supplement the PFMA.

"So when you try and improve the PFMA you need to see how those links work properly and how do you align them from a legislative process."

Nomvalo said public officials needed to be mindful that the Prevention and Combating of Corrupt Activities Act obliged them to respond to misconduct as defined in the PFMA and detected in their departments.

"These two things do tie (together) so that you need to create links, so that people understand the implications of either doing something or not doing something."

He said existing sanctions needed to be properly implemented, and supported Gordhan's call for politicians to take a more active role in weeding out corruption in their departments.

"You need to implement the sanctions that you have. To the extent that people need to be jailed we must get people jailed.

"You also need to create a mechanism that ensures that people are able to hold accounting officers to account, but you know, politicians who are head of departments must do that."

Nomvalo singled out Home Affairs Minister Nkosazana Dlamini-Zuma and her predecessor Mapisa Nosiviwe-Nqakula for praise, saying their departments improved because they personally delved into problems.

He said parliament was the second line of defence "because if the minister does not do anything, the whole department is accountable to parliament".

The accountant general expressed frustration with the length of time officials suspended for alleged wrongdoing spent on full pay.

"The problem with it taking too much time to deal with somebody that has been suspended is that in a way amounts to wasteful expenditure," he said.

"I think is should be a frustration to the country that resources are spent in that particular manner."

Gordhan was briefing MPs on his medium-term budget policy statement delivered on Tuesday.

He faced questions on tackling graft, which Special Investigating Unit head Willie Hofmeyr claimed this month could cost the state 20% of its procurement budget or R25bn annually.
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