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- Severe incapacity threatens South Africa, where institutions seem unable to deliver on their mandates.
- This has real consequences for human life and livelihoods – now more than ever.
- A further problem remains the accountability vacuum, with poor audit outcomes and a lack of credibility within auditing itself.
This past week, in a dialogue hosted by the Association for Black Securities and Investment Professionals, Mr Edgar Sishi, the deputy-director general from National Treasury's Budget Office, explained the key purpose behind last week's budget statement.
According to Mr Sishi, National Treasury sought to address two key issues. The first issue dealt primarily with what fiscal policy interventions could be put in place in order to assist South Africa to navigate through the current healthcare crisis.
Secondly, the purpose of last week's budget statement was the focus on the longer-term issues relating to SA's fragile economic position. In relation to the primary issue of the healthcare interventions, the R500-billion stimulus package put together by the government has been central to leading the charge against the virus.
The stimulus package is made up of multiple components whose efficacy can now be evaluated with the benefit of at least three months of hindsight. The fundamental objective of the package, which was trying to provide relief to various members of society through social assistance interventions, was always subject to the implementation and delivery capacity of the various agencies responsible for the administration.
Capacity problems
The initial anxieties around this approach were created by concerns about the longstanding capacity issues of agencies like Sassa. It is the organisation that has – since time immemorial – failed to create internal capacity to administer social grants.
The social grants that Sassa historically administers are focused on a limited audience made up of pensioners and child grant recipients primarily.
Under the current intervention, the same Sassa was then given the additional responsibility of administering additional grants to its existing database in the form of top-ups of child grants and child support caregiver grants.
Even more crucially, Sassa was then given the responsibility to venture into the unknown. The unknown territory in this case relates to the citizens that theoretically qualified for the R350 social relief grant.
The obvious fundamental issue in relation to this grant was the fact that the comprehensive data related to this group of citizens was unknown to Sassa itself, and also elusive to other agencies of the state. The process therefore of identifying how many citizens would qualify, and then screening out those who already had other forms of assistance, was going to be the primary challenge.
Anecdotally the data relating to these citizens would have been sourced from a combination of the SARS, Home Affairs, UIF and the Department of Labour databases.
Unfortunately, a common feature of the state's data management approach is the maintenance of the data in discrete silos, with a limited capacity to interact with each other. This already created an opportunity for citizens to be missed in the assessment or to be counted and accounted for more than once.
As a result, the process of simply identifying who needed to be paid was going to take some time to master. What is less easy to digest however is the question of why, in an environment that required speed and urgency, such issues were not addressed before the social intervention packages were announced.
High expectations, low outcomes
The consequence of this dilemma is that citizens who are desperately in need of the social assistance packages are still struggling to access them and are now victims of high expectations and nonexistent outcomes.
Whilst sceptics may argue that most citizens have become used to interacting with the state within a prism of high expectations and low outcomes, never before has human life and livelihoods been so threatened by the state's incapacity. This is a terrible indictment on the state's ability to administer its own resources in a manner that achieves optimal outcomes.
A second pillar, and a key institution that formed part of the solution, was the UIF. As the agency responsible for administering unemployment benefits to individuals transitioning between jobs, the UIF has a much longer track record in identifying who needs to be paid and how much they need to be paid. The primary limitation however has always been the fact that, whilst the UIF is more than capable of dealing with disbursements using employers as the conduit, the current crisis required something new from it.
In order to speed up the movement of funds into the pockets of the disaffected and displaced employees, the UIF had to consider bypassing employers as a conduit and paying affected employees directly. Regrettably their systems seemed to have found this burden a bit too high to bear in the short run. As a consequence, frustrations exist between employers and employees. Recent reports relating to the fraudulent payments of R5.7 million from the UIF itself have not helped people establish a sense of faith in the institution.
Why the incapacity?
A key point to take from these two case studies is a longstanding question of why so many institutions and agencies of state are incapable of running their own core businesses. The Sassa case study, just like the Tasima case study in the Department of Transport and various stories from Eskom for example, indicate a high reliance on external service providers to facilitate the delivery of the core duties of such entities.
This not only comes at a significant but avoidable cost to these entities and, by extension, the taxpayer, they also indicate that the transfer of institutional wisdom is not occurring at the right level and depth. This then creates a longer-term dependency on outsourced service providers, consultants, overnight accountants and similar agencies.
In last week's briefing to Parliament, the office of the Auditor General summarised the phenomenon by titling its latest report on municipal finances as 'Not much to go around, yet not the right hands at the till.' The implications are clear; whilst public resources are scarce and diminishing, the little we do have isn't being managed properly.
Our current reality is that at municipal level far too many accountability structures are technically dysfunctional. The modus operandi has become that whenever key tasks need to be executed these institutions gravitate towards hiring outsiders to do the work in the shortest time possible but never focus on transferring the knowledge to the permanent employees.
As a result, the internal institutional capacity of such municipalities to run their own affairs is compromised. This state of paralysis leads to a proliferation of parallel structures and systems throughout the civil service and generates what is referred to as the parallel state.
This has profound implications for accountability as private consultants have a permanent plausible deniability clause – "We relied on what we were told by insiders". Insiders themselves absolve themselves of responsibility by simply citing the "prestige deniability clause" – "We hired a blue-label consultant or auditor named McKinsey or Deloitte so therefore we went with what they recommended". It is in this accountability vacuum where so much in public resources has gone to waste and will continue to unless drastic reforms in accountability become entrenched in the civil service.
