senior government officials to declare their interests
17 March 2006
The Auditor-General (AG) tabled an audit report on the declarations of
interests by Ministers, Deputy Ministers and Government Employees in Parliament
on Friday, 17 March 2006, following an investigation that was conducted at 142
national and provincial government departments. The AGâs investigation revealed
that the majority of members of government, who were either directors or
members in companies or close corporations, failed to declare their interests
as prescribed by law.
âThe purpose of the investigation was to look at the trends and extent of
compliance to the legal framework that government has put in place to promote
the principles of transparency. The objective of the report is to facilitate
public accountability by bringing to the attention of Parliament the
transversal findings on the declarations of interest by Ministers, Deputy
Ministers and non-designated government employees performing remunerative
work,â says the Auditor-General of South Africa, Mr Shauket Fakie.
âAs an institution supporting democracy, part of our role is to enable
government to improve compliance by bringing to their attention the areas where
they should improve and where the legislature needs to focus oversight in the
different spheres of government,â he says.
âIt is hoped that this report will give rise to corrective steps, which
should contribute constructively to the establishment and implementation of
proper management measures and controls and consequently to improved the
behaviour, ethics and culture amongst government officials,â he says.
The AGâs report contains the summarised findings of the investigation, as
well as comments by the Registrar of Membersâ Interests, the Secretary of the
Cabinet and the Executive Authorities.
The findings are based on exceptions reports compiled, using the following
databases:
* CIPRO database of directors of companies and members of close corporations
as at 30 June 2004
* Personnel and Salary System (PERSAL) payroll data for September 2004
* Basic Accounting System (BAS) for September 2004.
The following main findings were highlighted in the report:
Ministers, Deputy Ministers and spouses:
* A total of 20 Ministers, Deputy Ministers and eight spouses were identified
as directors or members in companies and close corporations. Of the 20, at
least 14 members did not declare all their interests to the Registrar and/or to
the Secretary of the Cabinet. The financial interests of the Membersâ spouses
are confidential and were therefore forwarded to the Registrar and the
Secretary for follow-up.
* In certain instances the Ministers and Deputy Ministers provided
documentation to the Registrar and the Secretary indicating that they had
resigned as directors or members of private companies or close corporations.
However, it seems that the CIPRO database was not timorously updated with this
information.
* The oversight as far as section 21 companies was due to uncertainties about
directorships which arose from Government appointments in relation to work of
Government.
Designated employees:
* The majority of the 1 678 designated employees, spread among national and
provincial government identified as directors or members in companies and close
corporations, did not disclose all of their directorships and memberships as
required by the Public Service Regulations.
* A number of executive authorities failed to submit the annual financial
declaration forms for the 2003/04 financial year or the forms were only
submitted after expiry of the prescribed time frames.
* Weaknesses concerning the administration of designated employee declarations
identified include that neither the executive authorities nor the Public
Service Commission (PSC) performed reviews of the declarations to determine the
completeness thereof. The executive authorities also did not have sufficient
measures in place to ensure that every designated employee submits an annual
declaration form to the PSC as stipulated in the Public Service Act and
Regulations.
Non-designated employees:
* A total of 50 223 non-designated employees, spread among national and
provincial departments were identified as directors and/or members of companies
and/or close corporations. Every department included in the scope of the
investigations had instances of non-designated employee directorships or
memberships in companies and/or close corporations.
* The majority of departments did not have systems of control in place to
manage the performance of other remunerative work by non-designated
employees.
* Due to insufficient departmental responses, the investigations were unable to
conclude whether non-designated employees were in fact receiving remuneration
due to their financial interests in companies and close corporations, or had
the required approval for performing other remunerative work.
In their response the Registrar, the Secretary and Executive Authorities
commented that the CIPRO database of directors and members had not been updated
timeously as the database still indicates that certain Ministers, Deputy
Ministers as well as designated and non-designated employees are members or
directors of companies or close corporations although they had
resigned/terminated their directorship and membership.
According to the Registrar, all Ministers and Deputy Ministers who have not
disclosed their interests will be requested to update their financial interest
in accordance with the Code of Conduct. According to the Secretary, all
Ministers and Deputy Ministers have been informed in writing about the
investigation and were requested to follow up the matter with the
Auditor-General.
Executive Authorities have further noted that the findings of the
investigations are currently being followed up and disciplinary action is being
considered against a number of officials.
A preliminary comparison with Basic Accounting System (BAS) financial data
indicated that, due to the materiality and extent of economic transactions with
government employees who are directors or members in companies or close
corporations, a separate audit report will be issued on the economic activity
of government employee-related entities with government. Detailed procedures
are currently being finalised for investigating these transactions, and the
outcome thereof will be presented in a separate report.
Enquiries:
Adri van der Merwe
Tel: (012) 426 8175
Cell: 082 787 5291
Email: adrivdm@agsa.co.za
Issued by: Office of the Auditor-General of South Africa
17 April 2006
Source: Auditor-General (http://www.agsa.co.za)
