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AUDITOR-GENERAL AD HOC COMMITTEE
8 March 2005
AUDITOR GENERAL BUDGET, REAPPOINTMENT OF DEPUTY AUDITOR-GENERAL; ADVICE FROM NATIONAL ASSEMBLY SECRETARY ON ARMS DEAL: DELIBERATIONS
Documents handed out:
Office of the Auditor-General Strategic Plan and Budget 2004 – 2006 consisting of three parts: A list of alterations that had been made to the document, the actual document with the changes inserted and the final printer’s proof (email firstname.lastname@example.org for document)
Memorandum from Secretary of National Assembly: Advice re: Allegations of Alleged Interference in the Arms Deal Report.
Memo from Speaker to Secretary of National Assembly (see Appendix 1)
Speaker’s response to adoption of 134th Report by Standing on Public Accounts (see Appendix 2)
Matters for discussion by the Ad Hoc Committee included the Budget Document of the Auditor-General, the reappointment of the Deputy Auditor-General and the reply from Mr Hahndiek, the Secretary to the National Assembly containing his advice on the allegations of alleged interference in the Arms Deal Report.
Strategic Plan and Budget Document of Auditor-General
Mr S Fakie, the Auditor-General, addressed the meeting. He highlighted each change that had been made to the Budget Document that the Committee had previously approved. He said the areas the Committee had previously expressed concern about were the discretionary personnel expenditure, discretionary expenditure for the restructuring of corporate services and the principles of the performance budget. Mr Fakie said all items contained in the Committee’s report had been included in the final document. Many of the changes emanated from the preliminary budget having provided three scenarios for increases whereas the Committee had agreed on an increase of 4%. This was the amount that had therefore been used in the revised document and the Projected Income had also worked been out in terms of the 4% increase. Mr Fakie stressed that the actual detailed budget document had not changed but the explanatory and strategy documents had been polished. The same document that the Committee had considered would be tabled before Parliament and not the abbreviated document.
There were no questions from the floor.
Reappointment of Deputy Auditor-General
Ms Hogan addressed the Committee on the issue of the re-appointment of the Deputy Auditor-General whose contract expired on the 31 May 2005. In terms of the Public Audit Act, the Auditor-General could appoint a Deputy Auditor-General after consultation with the Ad Hoc Committee. Ms Hogan proposed that a multi-party Remuneration SubCommittee be convened to investigate the details of the appointment and to make recommendations to the Auditor-General.
Mr S Asiya (ANC) agreed that this would be appropriate. He said an open forum would preempt other things that would not be necessary.
It was accepted that Ms Hogan would convene such a meeting. Mr Fakie left the meeting.
Memorandum from the Secretary of the National Assembly: Advice re allegations of alleged interference in the Arms Deal Report
Ms Hogan explained that Mr E Trent (DA) had asked the Committee to discuss the process that could be followed in connection with the allegations of alleged interference in the Arms Deal Report by the Office of the Auditor-General. The role of the Ad Hoc Committee had been discussed at an earlier meeting and questions had subsequently been posed in a letter to Mr Hahndiek, the Secretary of the National Assembly. The latter’s reply was tabled for discussion.
Dr G Woods (IFP) asked if Mr Hahndiek would be present at the meeting because he felt there were several ambiguities in the document that he had hoped Mr Hahndiek would be able to give clarity on.
Ms Hogan had not considered it and said the Committee could take note of issues and ask Mr Hahndiek to respond further.
Dr Woods said Mr Hahndiek had indicated that the Ad Hoc Committee was not the forum to address the issue. He felt there was a political reluctance on the part of Parliament to deal with the allegations that were appearing in the media and that Rule 66 was used to fob the issue off.
Mr S Asiya (ANC) raised a point of order and said Ms Hogan had made a ruling in terms of the document and the views of other Committees should not be entertained.
Ms Hogan argued that the meeting did not constitute a formal parliamentary process and that she wanted the Committee to hear Dr Woods out.
Dr Woods said it was really important to ensure that the opinion received was correct and he had several questions regarding the opinion of Mr Hahndiek. Ms Hogan said Dr Woods was entitled to opinions and that she wanted to go through the document first before judging the issue.
Ms T Tobias (ANC) did not want the Committees to discuss other Committees’ opinions, as this would not be correct. She did not want to discuss what the Standing Committee on Public Acccounts (SCOPA) was saying.
Mr D Gumede (ANC) said Dr Woods needed to substantiate and motivate his position and thereafter the Committee could look at the merits and a vote could be taken.
Ms Hogan commented that she did not want to get into issues of procedure.
Mr E Trent (DA) argued that he was the one who had written the letter in the first place and nowhere had he ever stated that the Auditor-General was guilty of any offence but somehow Rule 66 was always being brought in.
Ms Hogan said the first question was whether the Ad Hoc Committee was the right Committee to deal with the allegations. She felt that as the Ad Hoc Committee was very temporary, it could not deal with the issue. Proposals could however be made by the Ad Hoc Committee.
Mr Woods felt there was some uncertainty about the mandate of the Ad Hoc Committee.
Ms Hogan said the resolution was a difficult one because it was a "pending" Committee Ms J Fubbs (ANC) agreed that the purpose of the Committee was to deal with the urgency of the budget and other matters at a particular time and in the absence of the Audit Commission. A bridging mechanism had been established and the word "pending" had a lot of significance.
Mr Asiya said if one looked for a legal opinion one could get twenty opinions from twenty different lawyers. Having said that however, he agreed that if the Committee wanted to progress it could make recommendations but as an Ad Hoc Committee it could not resolve the issue.
Mr M Johnson (ANC) asked what the Ad Hoc Committee was expected to do after the Budget and the Strategic Plan had been dealt with. When was the Committee expected come to an end? It was not the duty of the Ad Hoc Committee to decide where the issue belonged. Whoever made this decision however, should ensure that the matter was dealt with responsibly. The establishment of the Oversight Committee had to be the next step.
Ms S Rajbally (MF) asked how long the Committee in its current form would continue because it’s decisions could not be made final. What were the possibilities of establishing the Oversight Committee?
Mr Trent said the memorandum suggested it was not appropriate for the Ad Hoc Committee to consider the issue and he also referred to the new Committee and its mandate as described on page 4, chapter 6 of the memorandum. Which Committees would deal with these issues and other matters of substance? Mr Hahndiek stated that SCOPA had the necessary mandate to consider the issue but Mt Trent did not see that one could refer the matter back to SCOPA. He said the aim was not to damage an Institution but to seek the truth and that the issue could not drag on forever. The new Committee needed to be appointed quickly.
Ms Hogan said she had written to the Speakers Office, the Chief Whip and Office of the Auditor-General after the meeting on the 9th February stating the Ad Hoc Committee had completed its work and it was desirable for an Oversight Committee to be established. There were a number of issues for an Oversight Committee to deal work. She had had no response but the Auditor-General had said he had taken the matter up with the Office of the Speaker.
Ms Tobias agreed that the process had to be speeded up. Mr Trent’s opinion about the integrity of the Auditor-General remained his own opinion and the Committee had not debated the issue. The work of the Ad Hoc Committee had been completed and what the next mechanism should concentrate on was not up to them. She argued that it was impossible for Committees to consider all allegations that appeared in the media.
Ms Hogan clarified that the Committee had not only been mandated to deal with the Budget and the Annual Report but a further resolution had come before the House and that was the oversight role of the Ad Hoc Committee.
She also explained the Rule 66 route and felt Clause 7 and 8 on page 4 of the memorandum were a bit ambiguous. It stated that SCOPA had the necessary mandate to inquire into the Arms Deal Report issue however, neither SCOPA nor any other Committee could take a resolution or inquire into the integrity of the Auditor-General. This could only be undertaken by a very senior Committee constituted in Parliament.
Mr Asiya noted that the AD Hoc Committee was not saying the process should not go ahead but that it was not the appropriate place to investigate the allegations. He suggested another letter be written asking for an urgent establishment of the permanent Committee to carry the oversight role.
Ms Hogan reiterated that an urgent letter to the Speaker was necessary.
Dr Woods said it would be good to conclude whether the Ad Hoc Committee was the appropriate vehicle to take the matter forward. The Rules Committee was still discussing the establishment of the Oversight Committee and that it might still be some time before this happened. The present Committee still had the mandate to oversee the work of the Auditor-General. He proposed that they had the full mandate and did not have to pick and choose what issues they dealt with.
Mr Trent wanted to make it clear to Ms Tobias that he did not want to reopen the Arms Deal but the investigation would be of the Office of the Auditor-General and the alleged substantive changes that had been made to the Arms Deal Report. If the route via the Ad Hoc Committee was going to take forever maybe he would have to take the matter back to SCOPA.
Ms Hogan replied to Dr Wood’s comment about the intention of Parliament in its establishment of Oversight Committees. In her experience everyone wanted the Oversight Committee to be established with due expediency and the Ad Hoc Committee was only a temporary position put in place because the President had not as yet signed the Legislation regarding the establishment of the Oversight Mechanism. The Speaker could give clarity on this issue. The second resolution (i.e. to exercise oversight) was a further extension of the Ad Hoc Committee’s mandate because at that time the Auditor-General’s budget was not ready and would not have been ready for another year. She agreed that a non-permanent Committee could not deal with the issue under discussion whereas SCOPA could investigate the matter. There were two options, either to go back to SCOPA or wait for the Oversight Mechanism to be put in place.
Ms Hogan also questioned how the allegations had come into the Parliamentary arena. No one had ever brought anything specific to her or the ANC but it was only the Opposition Parties who seemed to have received such allegations. Something substantive was needed if it the matter was to be taken up by a Committee.
Mr Trent replied that he could present information the minute he knew which Committee to take it to and he would like Ms Hogan to approach the Speaker again.
Ms Hogan said in the past the Auditor-General has appeared before Parliament and he could be asked again to come before the Committee to answer questions.
Ms Hogan added she was concerned that Mr Hahndiek seemed to reduce the work of the Oversight Committee to an administrative or procedural function and had omitted Clause 2 of the Public Audit Act. Dr Woods said this was what something he would have liked Mr Hahndiek to clarify.
Ms Hogan proposed that the Speaker be approached again regarding the urgency of an Oversight Mechanism and if any members had material that was of any substance they could ask SCOPA to take the process further.
Ms Fubbs said the Committee would not be appropriate place at any time not just at that time. She said the principle of oversight was to ensure that the appropriate Committee had a clear mandate to deal with the matter and that the job was done properly.
Mr Trent said he failed to see why there had to be any delay in establishing the Committee.
Ms Hogan said she would send the letter forthwith. She also undertook to convene the Remuneration Committee.
The meeting was adjourned.
Reports accordingly adopted.
24 February 2005
10. [16:33] The Speaker made the following statement in response to the adoption. by the House, of the One-Hundred-and-Thirty-Fourth Report of Standing Committee on Public Accounts:
Hon members, in the Report the House just adopted the Public Accounts Committee recommends that the Auditor-General's concerns, as expressed in paragraph 6 of his Special Report, about the possible transgression of Rule 66 be referred to me for such action as may be considered appropriate". The Auditor-General also wrote to me directly to voice his concerns.
The purpose of Rule 66, a rule made by this House, is to protect the integrity and independence of judges, the Auditor-General and office bearers of other constitutional structures and to prevent unwarranted and unsubstantiated attacks in this House on their honour or competence. Parliament pre-eminently should be committed to upholding and protecting the independence and standing of those institutions, which are required to play a key role in our constitutional democracy.
If there are grounds for an investigation of the conduct of such office-bearers, this House has available the mechanism of a substantive motion, and procedures for such substantive motions still need to be worked out.
Although steps were taken by the Chair at the time to restrain members from transgressing Rule 66, various members were disinclined to observe the letter and spirit of the Rule. This is both unacceptable and regrettable.
I would therefore strongly recommend that the next Parliament should give serious attention to all facets of the interrelationship between Parliament arid the constitutional institutions supporting democracy, on the one hand to prevent those institutions from being undermined within Parliament and, on the other hand, to establish effective accountability mechanisms.
Hon members. I thank you. This ruling will be passed on to the next Parliament.
- The House adjoumed at 16:36.
Secretary to Parliament
Re Allegations of Alleged interference in the Arms Dent Report.
24 February 2004
A letter from Mr Eddie Trent was discussed in the Ad Hoc Committee on the Office of the Auditor-General on 4th February 2005. Mr Trent drew attention to "press reports arid debates in. the public domain alleging that various irregularities in the arms deal occurred, and that potentially embarrassing facts and information from the Auditor- General's Anns Deal Report were removal….I urge you as chair of the Ad Hoc Committee on the Office of the Auditor-General, to place a discussion of a way forward in dealing with these issues on the agenda of the upcoming meeting (scheduled for Friday 4 February 2005) of the Committee." A copy of the letter is attached in this regard.
It was decided that before the Committee could proceed it needed to seek procedural advice on the following matters:
1. This Committee's mandate was established in terms of two resolutions that were adopted in the House which, firstly, required the Committee to consider and report to the House on the annual report and budget of the Office of the Auditor General (pending the establishment of the Parliamentary Committee in terms of the Public Audit Bill) and secondly, required the committee "to maintain oversight over the Auditor-General and for that purpose to continue with its functions until the oversight. mechanism envisaged in the Public Audit Bill is established." (Resolution No.6 OF 11/112(2004). Both resolutions clearly anticipate tie setting up of a Parliamentary Committee, the creation of which will terminate the tenure of the Ad Hoc Committee. The Public Audit Bill has now been signed into being thus removing the major obstacle for the establishment of the oversight mechanism,' it is quite conceivable that in the very near future, the Ad Hoc Committee's term of office will expire. Given the gravity of the allegations and the short-term tenure of the Committee, is it appropriate for this Committee to agree on a process ahead and even to start deliberations on the substantive matters referred to in Mr. Trent's letter (should it deem that such scrutiny is warranted.) given its "temporary" status as a. Committee?
2. The Ad Hoc Committee is mandated to maintain oversight over the Auditor-General. What is meant by oversight in this context? For the sake of consistency would it be preferable to align the oversight function of the Committee with the responsibilities assigned to tile proposed oversight mechanism in the Public Audit Act, or should the Committee develop its own view of its oversight role?
3. Prior to the promulgation of the Public Audit Act, the Standing Committee on Public Accounts (SCOPA) reported on a Special Report initiated by the Auditor-General relating to certain chapters of the draft and final Joint investigative Report (ITT) pertaining to complaints made by a company called C212. The substance of the matters, that are referred to in Mr. Trent's letter, go beyond the chapters referred to above and cover most of the JIT report In your opinion, given the mandates that has been conferred on these Committees by resolution of the National Assembly (Ad Hoc Committee), by the rules of Parliament (SCOPA), and by statute (the oversight mechanism in the Public Audit Act) which Committee should deal with these matters? In this regard, I refer you to Section 2(c) of the Public Audit Act which stipulates tat one of the objects of the Act are to provide for an oversight mechanism to assist and protect tile Auditor-General in order to ensure the independence, impartiality1 dignity, and effectiveness of The Auditor-General and to advise the National Assembly. I also refer you to Sections 7(1), 13(1), 23(1), 38(2)(3)(4), 31(1), 39(1), 40)(6)(b)(iii) and 41(5) amongst others that refer to the its oversight functions I further refer you, amongst others, to Rule 206(1)(a)(iii), (c), and (d) of the Rules of the National Assembly, which inter alia, state that SCOPA must perform any function assigned to it concerning parliamentary financial oversight or supervision of executive organs of state, constitutional institutions, or other public bodies. Finally, I refer you to Resolution 6 of II November 2004, which mandates the Ad hoc Committee to maintain oversight over the Auditor-General until the oversight mechanism envisaged in the Public Audit Act is established.
4 Would it be procedurally regular for a Committee established by statue (i.e. the Oversight Committee) to have a conferring relationship with another Committee (e g SCOPA) on these particular matters? Would the basis of conferral have to be specified?
5 Finally, Rule 66 requires that any reflection on the competence or honour of a holder of an office whose removal is dependent upon a decision of the House, may only be done on the basis of a substantive motion in the House, alleging facts which if true, would in the opinion of the Speaker, prima facie warrant a removal from the House Does this mean that any Committee of Parliament may only investigate the facts surrounding the allegations but would have to refrain, in its deliberations, from reflecting on the competence or honour of be person concerned in observance of Rule 66?
I would be most grateful if you could comment on these matters as it would assist the Committee in charting a way forward. Thank you.
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