Financial Management of Parliament Amendment Bill: adoption

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Finance Standing Committee

28 January 2014
Chairperson: Mr T Mufamadi (ANC)
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Meeting Summary

The Committee heard a short briefing from the parliamentary legal advisor on the outstanding matters before finalsing the Amendment Bill

The flagged matters were that the executive authority should not be part of the oversight committee; that Parliament could not pass its own budget without the oversight mechanism being established and the oversight mechanism fulfilling its obligations; the accounting officer (Secretary of Parliament) had to be given extra functions and should seek approval from the executive authority;  the accounting officer had to notify the Auditor-General and the oversight mechanism in writing if a contract was awarded other than the recommended one; the accounting officer had to report unauthorised irregular expenditure and fruitless and wasteful expenditure immediately to the executive authority and to the oversight mechanism; the accounting officer complies with requests by Members of Parliament, Parliament, the executive authority and/or the Auditor-General and clause seven which was a new clause where the executive authority should investigate promptly any allegation of financial misconduct.

Members asked what the motivation was for the change to clause 6 (amending section 4 of the Act) was and who had canvassed for it as this was the most important clause. Members felt it was not proper for the executive authority to sit on the oversight mechanism. Section 4 should be kept. Members supported Adv Jenkins arguments for all the other amendments because there should be a clear distinction from operational affairs. Members said the point of the oversight mechanism was to give Members of Parliament oversight over parliamentary affairs. The original drafters in 2009 had specified in section 4 that the executive authority could not be a member of the oversight committee. In Finland and France this was the case. Members said the second proposal had been mooted because the oversight committee envisaged in the 2009 Act had not been implemented. Members said the Joint Rules Committee would determine the functions of the members of the oversight mechanism and that all parties were represented on the oversight mechanism. Members said the Constitutional Court had asked for amendments to be made. This was done but extra amendments had been added. The presence of the Secretary of Parliament and the NCOP Chairperson on the oversight mechanism was a conflict of interest on a professional not a personal level. Members
said oversight originated from the Joint Rules Committee where the Secretary of Parliament and the NCOP Chairperson took part in the proceedings. Members siad the third proposal was made to ensure that Members of Parliament play the role that they should. The Secretary of Parliament and the NCOP Chairperson should be accountable to Parliament, Members of Parliament and the oversight mechanism. Members' proposals three to seven all made a strong case for enhancing the role of MPs.

The Committee then went through the Bill clause by clause.

Some Members pointed out that six insertions had not yet been discussed at all and objected to the procedure being followed. For clause 6 (amending section 4 of the Act), Members agreed to deleting the words from “except….” till the end of  6(b). Again, some Members said clarity on clause 7 was needed and was being refused and that the pace at which they were moving was too quick, that these were complex issues. After being refused his request for clarity, a Democratic Alliance member left the meeting. The Committee continued going through the rest of the clauses.

During the vote on the Bill, the Democratic Alliance registered its objections and requested clarification on the conditional and unconditional donor funding in clause 7.
The Bill with the proposed amendments was adopted by the Committee.

Meeting report

Outstanding flagged amendments to Financial Management of Parliament Amendment Bill: briefing
Adv Frank Jenkins, parliamentary legal advisor, said the briefing would focus on the outstanding issues. Parliament had a role to play in the oversight mechanism and in other countries they also participated but not so much in the operations side. In the draft bill any Member could sit on the oversight mechanism.

The second proposed amendment by Mr Harris was that Parliament could not pass its own budget without the oversight mechanism being established and the oversight mechanism fulfilling its obligations.

Adv Jenkins said this was a risky exercise and could hold up the work of Parliament.

In the third proposed amendment, the accounting officer had to be given extra functions and should seek approval from the executive authority.

Adv Jenkins said this was a governance issue and should not be seen as being involved in operational activities. Therefore the structure of the Act was sufficient to ensure that accountability lay with the accounting officer.

In the fourth proposed amendment, the accounting officer had to notify the Auditor-General (AG) and the oversight mechanism in writing if a contract was awarded other than the recommended one.

Adv Jenkins said he could see no purpose in giving it this function as oversight did not mean approving or disapproving operational issues.

In the fifth proposed amendment, amending Section 63 (Reporting of irregularities) of the Act, the accounting officer had to report unauthorised irregular expenditure and fruitless and wasteful expenditure immediately to the executive authority and to the oversight mechanism.

Adv Jenkins asked why this should occur. Did the oversight mechanism need to approve the expenditure?

The sixth proposed amendment was that the accounting officer complies with requests by Members of Parliament, Parliament, the executive authority and/or the AG.

Adv Jenkins’ concern was that it was impinging on the operational duties of the Secretary of Parliament who was the accounting officer and felt that it should not be written into legislation.

Clause 7 was a new clause where the executive authority should investigate promptly any allegation of financial misconduct.

Adv Jenkins said that the Annual Report of Parliament already contained disciplinary or criminal prosecution steps that had been taken with regard to the financial statements. What would the oversight mechanism do with the information. Therefore he did not think that the oversight mechanism should be immediately informed about issues as it was premature to do so at the investigative stage.

Deliberations
Mr N Koornhof (COPE) asked what the motivation of the change to clause 6 (amending section 4) was and who had canvassed for it as this was the most important clause.

Adv Jenkins said he had taken instructions from the Secretary of Parliament who had discussed matters with the executive authority.

Mr Koornhof said he felt it was not proper for the executive authority to sit on the oversight mechanism. Section 4 should be kept. He supported Adv Jenkins arguments for all the other amendments because there should be a clear distinction from operational affairs.

Mr T Harris (DA) said the point of the oversight mechanism was to give Members of Parliament oversight over parliamentary affairs. The original drafters in 2009 had specified in section 4 of the Act that the executive authority could not be members of the oversight committee. In Finland and France this was the case.

Mr Harris said the second proposal had been mooted because the oversight committee envisaged in the 2009 Act had not been implemented.

Mr D van Rooyen (ANC) said the Joint Rules Committee would determine the functions of the members of the oversight mechanism and that all parties were represented on the oversight mechanism.

Mr D Ross (DA) said the oversight mechanism needed to be independent and this was an opportunity to implement that independence, accountability and distance from the executive authority.

Mr Koornhof asked what the Secretary of Parliament and the NCOP Chairperson felt about the matter.

Mr Harris said that while the 2009 Act excluded the executive authority, they could be summoned when needed.

Ms Z Dlamini-Dubazana (ANC) said the Secretary of Parliament and the NCOP Chairperson had been given the powers to run Parliament

Ms J Tshabalala (ANC) said it was not true that the executive authority were a law unto themselves. She said how could strategic planning be done when the executive was not present. The Secretary of Parliament and the NCOP Chairperson had given their input to the Committee and she moved that the proposed amendments be accepted.

Mr Harris said the Constitutional Court had asked for amendments to be made. This was done but extra amendments had been added. The presence of the Secretary of Parliament and the NCOP Chairperson on the oversight mechanism was a conflict of interest on a professional not a personal level. He stood by his proposal that section 4 of the 2009 Act be retained.

Ms Tshabalala said oversight originated from the Joint Rules Committee where the Secretary of Parliament and the NCOP Chairperson took part in proceedings.

The Chairperson pointed out that on the issue of the presence of the Secretary of Parliament and the NCOP Chairperson on the oversight mechanism, the oversight mechanism had multiparty representation and the Joint Rules Committee would determine where and when there was conflict of interest related to the powers and functions of the Secretary of Parliament and the NCOP Chairperson. It was an arrangement found in other countries. He added that the Office of the Speaker should not be politicised as it should be a non-political position.

Ms F Adams (ANC) seconded Ms Tshabalala’s proposal.

Mr Harris registered the DA’s strong objections and that the oversight had to be established before the Parliament’s budget was passed so that the oversight mechanism could be implemented.

Mr van Rooyen said nothing stopped the Bill and its implementation from being monitored therefore he saw no reason for the inclusion of Mr. Harris’ proposal. The activities of Parliament would be hamstrung by its inclusion.

Adv Jenkins said there was precedent for a committee to monitor the establishment of such an oversight body.

The Chairperson said that a time frame should be put in place.

Mr van Rooyen said he did not know where in the Bill it would be put so it should be left out.

Mr Harris however agreed with the Chairperson.

The Chairperson said the time frame could be a recommendation of the Committee in its Report on the Bill but not be part of the Bill.

Mr Harris said the Democratic Alliance objected.

He said the third proposal was made to ensure that Members of Parliament play the role that they should. The Secretary of Parliament and the NCOP Chairperson should be accountable to Parliament, Members of Parliament and the oversight mechanism.

The Chairperson said that the oversight was not oversight of the operational affairs.

Mr Harris said his proposals from three to seven all made a strong case for enhancing the role of MPs.

The Committee disagreed to the proposals.

Mr Harris and Mr Ross registered their objections.

The Committee then went through the Bill clause by clause.

Mr Harris said six insertions had not yet been discussed at all. At the very least they needed to be briefed. He had a major objection to the procedure being followed.

Adv Jenkins said he was unaware of anything having been slipped in; it was the same Bill as the 7 October 2013. He continued that in clause 6 (amending section 4) the words  from “except….” Till the end of  6(b) would be removed.

Mr Harris called for the formulation to remain as it stood in the Act. He also called for the addition of a clause 5(a).

Mr van Rooyen said that that concern could be catered for in the Joint Rules Committee, not in the Bill.

Mr Harris said he needed clarity on clause 7 and was being refused.

Mr Ross said that the pace at which they were moving was too quick, that these were complex issues.

After being refused his request for clarity, Mr Harris left the meeting.

The Committee then went through the other clauses

Mr Ross registered the DA’s objections and requested clarification on the conditional and unconditional donor funding related to clause 7.

Adv Jenkins said donor funding was regulated by agreements between the parties concerned. In Parliament the funds had to be budgeted for if the funds were conditional. Direct funds were not part of Parliament’s own funds. Parliament currently received an appropriation but the Department of Finance was moving to it receiving an allocation which Parliament would approve.

The Committee adopted the Financial Management of Parliament Amendment Bill with amendments.

The meeting was adjourned.
 

Present

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