Disc Dem

Disc Dem

Friday, 24 July 2015

Disconnected Priorities

Mark Twain said, ”there are lies, damned lies, and statistics”, but there is an overwhelming body of evidence that demonstrates the present system of local government is fatally flawed and, unless fundamental changes are made, failure to deliver meaningful services at grass-roots level will be the main catalyst for the failed state that South Africa is presently destined to become.  Overreacting? I think not as, according to the Auditor General, in the 2013/14 municipal financial year, out of the 319 audits completed; 
·       22 municipalities and 8 municipal entities achieved clean audits. (9%)
·       138 municipalities received financially unqualified opinions with findings. This means that they accounted accurately for the financial transactions they have carried out. However, the ’with findings’ aspect indicates some potentially dodgy deals (41%)
·       84 Municipalities received ‘qualified’ audit opinions. This means that they were unable to adequately and accurately account for all the financial transactions and activities they conducted, and that the financial statements they presented were therefore unreliable. (25%)
·       8 municipalities received adverse audit opinions. In basic terms, this means that they did not feel accountable for the way in which they plundered the coffers. (2%)
·       59 municipalities received disclaimed audit opinions. These municipalities were unable to provide any evidence regarding the fair presentation of financial statements. In other words, anything could have happened to the financial resources entrusted to the municipality, and the auditor cannot express an opinion of any sort on whether the financial statements can be relied upon. (18%)
·       R695m was spent by municipalities on consultants (external service providers) to assist with the preparation of financial statements. This is over and above the fixed cost of those who are directly employed by municipalities to fulfill financial management and reporting responsibilities.  It is not rocket science to work out that around 81%, or R563m of that was (statistically) a waste of money.
·       R11.6 billion in irregular expenditure was incurred by municipalities as a result of “a significant breakdown in controls”.  R8 billion of this amount represents goods and services that were received but under dubious procurement practices, and for the balance of R3.6 billion there is no proof at all that the goods and services were ever received.
So, now we know that 50% of municipalities have no clue where our money is going, 41% know where it’s going but not necessarily how it is getting there, and only a paltry 9% know where it is going AND how it got there. 
It is interesting to note, however, that all a “clean” audit means is that designated procedures have been followed and there is a verifiable paper trail. Not that the money has been spent wisely.  A prime example is expenditures on new luxury vehicles for senior politicians.  Are they entitled to them under published regulations? – yes; have they followed procurement procedures? – yes; have they been approved in council? – yes; do they buy the vehicles? – yes;  can the municipality afford it? – NO; do they get a clean audit? – YES, because everything was done by the book.  In other words, all a clean audit really means is that they can spend our money any way they like, as long as the paperwork is neat and tidy. I doubt very much that even one municipality would come out clean from an audit performed to the same standards required for private sector audits.
Municipal elections in 2016 will entrench this unaccountable idiocracy for another 5 years, unless we make a move to do something about it.  The present Mixed-Member Proportional Representation System incorporating closed dual-candidacy party lists, is where the problem with accountability starts. How so? For true accountability to the electorate, a candidate must be totally dependent upon the direct votes they receive from us at the polls.  They are not. A dual-candidacy list allows them a second bite of the cherry in that, if we don’t vote them in directly, the party appoints them anyway as a proportional councillor.  All this serves to do is encourage candidates to brown-nose the party so that they are high enough on the list to become a councillor, no matter what our feelings are on the matter.
If we must keep proportional representation at this lowest tier of government, which is debatable, then I believe there should be two separate lists; one for constituency candidates standing for direct election, and one for proportional candidates. This way, we at least know that our views on constituency candidates are honoured, and not stomped on by political parties.
In my next post, I will explore the numerical arguments against proportional representation at local government level.  Some of the ideological ideas against it were outlined in my previous post "Our Democracy is Disconnected".
As a final thought, should the August 19th March against Corruption include local marches on the offices of every municipality in the country? These marches organised to demand an end to the personal enrichment of municipal politicians at the expense of service delivery. How about it Mr Vavi?

Saturday, 18 July 2015

Our Democracy is Disconnected

No, this is not just another rant at No1 and the never-ending tales of corruption and incompetence within National Government and their SOE’s.  The world and her brother (note the gender superiority) have a view on those issues, and quite frankly, along with the Greek/Eurozone tragedy, I am suffering from an opinion overload.

Also, top-down change, which most are baying for, will most likely not happen for at least 4 years. i.e. until the next general election in 2019. Whereupon, barring a constitutional upheaval, No1 will be blue-lighting his way to Nkandla - and if anyone really believes that he will be gone beforehand, can you please send me a sample of what you are smoking?
Nor is this going to be a rant in favour of the DA, EFF, or any other acronym-enabled political party, far from it in fact.

So what am I going to rant about?

That under the present system of local government our democracy has become disconnected and transitioned into an idiocracy. Yeah, boring low level stuff, not half as challenging as deciding how Eskom or PRASA should be run, or whether Greece should stay in the EU but, before you skip out of here, take just a moment to hear about the saga of Oudtshoorn Municipality. Since 2013, the only thing party politicians in that town have achieved is to bicker their way into bankruptcy and administration. Remember that this affects all of us because, wherever we live, our tax money will be used towards the Oudtshoorn bailout – sympathy for Greece, anyone?  Oudtshoorn is but one of many municipalities that clearly demonstrate the same party political malaise which significantly detracts from service delivery.

So, where is the disconnect, and what are the fundamental problems with this idiocracy?

The Proportional Representation Party List System is the Root Cause of Problems
There is no accountability to the electorate. Councillors are only accountable to their political party, not the electorate.  Think about that for a moment. A candidate stands for Ward Councillor.  We, the voters, don’t like him or her, so we reject them at the polls. However, they are high enough on the party list to be appointed anyway as a proportional councillor. So, the party effectively overrides the decision of the electorate, which rather defeats the point of elections, and places a candidate’s loyalty firmly in the hands of the party.
The Political cost of Service Delivery is too high
All Municipalities are struggling to fund delivery of basic services, yet we are paying twice the number of councillors than there are electoral wards. Countrywide, salaries for councillors amount to some R3bn, with proportional councillors accounting for around R1.4bn.  Even though proportional representation at local government level is written into the constitution, the cost is not sustainable at the coalface of service delivery.  New York City, with a population of around 8.5m people has 51 city councillors.  My own municipality of George in the Western Cape, with a population of <200k people, will have 53 councillors after the 2016 elections. Johannesburg will have around 260 councillors for a population half the size of New York City.  All we are really doing in South Africa is subsidising a political party’s payroll at the expense of infrastructure maintenance and development. 70% of all municipalities are spending more than the recommended 30% of revenue on salaries for councillors and officials, with almost half of these spending above 40% of their revenue on salaries.
Skewed GovernanceSmall, insignificant, proportional representation parties can, and in a number of instances do, hold the balance of power with no elected Ward Councillors.  The result in those situations is that around 4% of the voting public hold the other 96% to ransom. 
Abuse. All political parties abuse the list system to favour the party faithful who, regardless of whether they are fit-for-purpose, are appointed as councillors.  Senior Municipal Officials are required to hold all manner of qualifications, yet there is no minimum qualification to become a councillor. Some councillors are functionally illiterate, and the majority are financially illiterate.  Financial illiteracy is the most harmful as there is no understanding of the longer-term, and potentially dire, consequences of their borrowing and spending decisions. This occurs because political parties have an agenda relating solely to the acquisition of power, with little or no regard for service delivery.  In addition, the political resources available at this level of government tend not to be the sharpest intellectual knives in the drawer.
As a result, there is an across-the-board dissatisfaction with levels of service delivery, even in the so-called better run municipalities. The upper and middle classes complain about crime and grime, potholed roads that play havoc with wheel rims and tyres, and how all the money is being spent on “the poor”.  The poor complain, in many cases justifiably, that they receive either limited or no basic delivery of services.  Divisions and resentments between the classes are fanned by the politicians, who thrive on such discord.
So, party politicians at local government level have served only to drive wedges between the different sectors of our communities, whilst enriching themselves, and at the same time being disconnected from those communities.
Whichever angle you look at, it makes no sense to perpetuate this very costly and corrupted form of democracy at local government level. No doubt the politicians will find some spurious justification for its continuance.  After all, where else are they going to find the money to compensate the party faithful?    It is time to fight back against the party political cabals that are quietly, but effectively bleeding our country dry.

I have some ideas on how to redress the balance between political privilege and accountability to the people at local government level, which I will share in my next post.  I am not young enough to still know it all, so I would also like to hear from you what you think must change, and how we can attack this insidious problem.