Tue, 13 Apr 2021

When minister Tito Mboweni tables the 2021 Budget tomorrow, he will present to Parliament an impressive set of budget documents that include, amongst others, a forecast of tax collections, an analysis of the economy and how this feeds through to fiscal policy, and how spending plans will be funded.

Invariably, many will criticise the policy choices that the Budget Speech will contain.

Little, if any, criticism is likely to be lobbed at minister Mboweni for a lack of budget transparency, because it is one of the areas where the Treasury scores highly.

In 2020, as we were all dealing with the reality of the onset of Covid-19 and restricted to our homes, the International Budget Partnership based in Washington DC placed South Africa joint first with New Zealand in their Open Budget Index (OBI).

Since first participating in the Open Budget Index, South Africa has traded places with New Zealand in first and second spot and have also jointly held the top spot. It's an impressive achievement to be ranked as one of the most transparent countries in terms of budget information made available to the public and oversight institutions.

Achieving the number one spot in the OBI is not a fluke. It is the result of a comprehensive, consultative, inclusive, and technically complex process that involves hard trade-offs between often equally important policies and programmes. Some of these trade-offs are more obvious than others and don't always make sense because of political affiliations, narrow interests, and sometimes point scoring.

As the head of the expenditure planning unit in the National Treasury from 2004 to 2007, I coordinated the budget process and was responsible for the Estimates of National Expenditure (ENE) and the Adjusted ENE, amongst others.

Putting it all together was a mammoth task that involved budget hearings with all departments and agencies, follow-up meetings, many hours of editing, several late nights and frightfully early mornings, and lots of last-minute changes.

I take my hat off to former colleagues in the Treasury for pulling this off through the Covid-19 pandemic. They would have had to virtually stare-down Directors-General, Chief Financial Officers and Programme Managers from departments and agencies bidding for increases in funding.

Achieving budget transparency is hard work, literally involving blood, sweat and tears. But if transparency gets lost in the praise that follows the achievement of sharing the number one spot, then the blood, sweat and tears would have been in vain.

The reality is that budget transparency does not guarantee effective service delivery, neither does it lead to accountability by default.

Budget practitioners and scholars frame the public finance management process as comprising four stages. The first being those activities involved in formulating the budget. This is followed by the approval of the budget by the legislature (parliament) after they have had an opportunity to hold public hearings and also receive independent and expert inputs. Once the budget has been approved, the authority is given to government departments and agencies to spend within programme allocations.

It's in stage three where things often go wrong. The final stage of the process involves the evaluation of performance and financial audits by an external auditor.

A transparent process provides the public and oversight institutions with information on budget allocations, for example, to a maternal healthcare programme. It will disclose who the responsible programme manager is, how often the funds were paid to the implementing agency, the goods and services that were bought, and provides a set of accounts in accordance with recognised accounting practices. Whether the expected results or outcomes of the maternal health programme was achieved is a determination that is made further down the line.

Budget transparency assisted in lifting the lid on the 'security upgrades' at Nkandla but required a Public Protector in Thuli Madonsela that understood and delivered on her Constitutional duties.

On the flipside, the funds allocated for Covid-19 Personal Protective Equipment (PPE) is a case-study in how transparency is not a guarantee for effective service delivery.

The looting at the Passenger Rail Agency of South Africa (PRASA) over a period of almost 10 years is a case-study in the fragile link between transparency and accountability. From the budget documents we know that tens of billions of rands were allocated for passenger rail infrastructure and carriages, but not a single person has been held accountable for the ruin that was once a functioning passenger rail system.

Of the R36 billion worth of PPE tenders examined by the National Treasury, approximately R30 billion were found to be irregular. While this does not mean that R30 billion was used to purchase luxury cars and holidays, instead of used to purchase equipment that is meant to save healthcare workers from infection, it does mean that the purchase did not follow the prescribed emergency rules and regulations.

However, it often does mean that someone bought a luxury vehicle with the funds that were intended for a public service, like removing asbestos from houses in the Free State. As the evaluation of PPE spending digs deeper and gets to an annual audit, the full extent of service delivery failures will become known.

Although having a transparent budget will be critical in the investigation, it also reveals that transparency is only one part of the many other things needed for effective service delivery, such as ethical and capable public servants and strong institutions.

The PPE scandal occurred in the same year that South Africa was awarded the number one budget transparency score. Only a few months later, the testimony at the State Capture Commission revealed how Parliament failed to hold the PRASA looters to account. Both these cases, and several others, have come close to sinking my belief in the purpose of sacrificing my blood, sweat and tears for budget transparency.

Source: News24

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