Why do we insist on financial accountability to the public?
Some argue that focusing on corruption and maladministration detracts from the important issues of poverty and underdevelopment. The notion that effective development and poverty alleviation can be delivered through a system that contains corruption and malpractice is a misnomer:
Corruption and mal-administration are inconsistent with the rule of law and the fundamental values of our Constitution. They undermine the constitutional commitment to human dignity, the achievement of equality and the advancement of human rights and freedoms. They are the antithesis of the open, accountable, democratic government required by the Constitution. If allowed to go unchecked and unpunished they will pose a serious threat to our democratic state.i
Despite extensive legal and policy provisions geared towards ensuring the practice of good local governance in South African municipalities, the reality of local governance practice often falls well short of the policy ideal. A growing gap between the rhetoric of policy intentions and citizenвЂ™s day-to-day experiences of municipal governance runs the risk of alienating civil society. In the case of many semi-rural municipalities the danger is that municipal governance is increasingly regarded as a superfluous, wasteful institution whose operations depend on extensive support from other spheres of government. Furthermore,
there is a growing (and largely valid) perception within civil society that financial reporting and accounting conventions are either ignored or manipulated to withhold key information from public scrutiny.
Despite vigorous efforts to improve planning, budgeting and financial reporting, highly dependent municipalities run the risk of becoming вЂњdummyвЂќ institutions, which ultimately adds very little value to the lives of local citizens. Increasingly, there is a perception that local municipalities simply вЂњskim-offвЂ™вЂ™ a significant portion of the financial transfers from national government for expenditure that has little bearing on development or the provision of basic services to indigent households. Predominantly rural municipalities invariably have inadequate local revenue generation strategies in place and seem increasingly resigned to their fiscal dependence on national government.
Rates, for example, are not effectively levied or collected, despite the fact that Eastern Cape real estate has recently
appreciated greatly in value. The danger is that citizens increasingly begin to perceive local government as lacking legitimacy and effectiveness. This will lead to a breakdown in civil cooperation with local government that might include widespread efforts to avoid paying service charges and property tax. The introduction of the Property Rates Act, and possible resistance to the expansion and consolidation of the municipal rates base, is also pertinent to this trend.
A critical step in stemming the growing alienation and local level conflict between citizens / civil society and local government is to bridge the gap between policy and practice that currently characterises the reporting of municipal financial matters to the public.
Citizens need to regain a sense of real control over the manner in which municipal finances are expended and reported. In theory, policy instruments for ensuring such accountability are well established in the Municipal Systems Act, the Municipal Finance Management Act, and Municipal Performance Management Regulations. It is the practicality and effectiveness of these instruments that needs to be demonstrated in order to strengthen civil compliance and cooperation with what many poor and
middle-class residents regard as a weakening local state.
Judge Arthur Chaskalson in his capacity as president of the SA Constitutional Court. Extract from judgement in the case (CCT 27/00) in the matter between the SA Association of Personal Injury Lawyers and WH Heath head of the SIU and others, September to November 2000.