Editorial

Wastage of public funds has to stop 

The report of the Director of Audit for the fiscal year 2010 is out. As in past years, it has again drawn attention to the considerable waste of public funds in diverse ministries, which came to its attention. Accordingly, huge amounts have gone waste; systems have been bypassed to draw unjustified advantages, while loss has been occasioned in other places due to dereliction of duty and absence of adequate follow-up on projects. No doubt, more or other such cases will be uncovered next year. There will be shock and consternation at the abuses pointed out. They will be picked up again by the Public Accounts Committee and commented upon adversely and the public will keep treating it as a routine occurrence. All this ritual, it seems, will not stop the wastage of public funds from continuing. In the meantime, the public will keep contributing by paying up all sorts of taxes to fill the coffers of the Treasury in support of this system of perpetuation of wasted expenditures.

If this sort of thing had been happening in a private firm, in the majority of cases, the shareholders/directors would be taking the immediate appropriate redress actions in the light of the audit report to stop hurting the firm’s interests. They will do so immediately and not wait for the year to come to an end for initiating corrective actions. It must be understood that the job of auditors is to point out flaws in the system and not to implement remedial action. It is for the management of the concerned firm to recommend to the board actions to be taken for expeditious redress against the damage being done in the light of audit remarks. It goes to the credit of most important private firms that the auditors do not have to repeat year-in-year-out the same flaws as those they pointed out in the last year because remedial action would have been taken already by the combined efforts of Management/Board/Shareholders. As it is the pockets of shareholders that are badly hurt in cases of mismanagement in such cases, no time or effort is wasted to take corrective action. Where negligence persists, share prices tumble down and the firm finds itself eventually under-capitalised or goes into liquidation. Mauritius Inc. appears to be immune from the rapid redress system prevailing in private firms in such cases.

In the case of the public sector, it is the efficiency of the government’s revenue collection and its spending that call the attention of the Director of Audit. In this case, the Management/Board/Shareholders in the example of the private firm are substituted by the top civil servants/Ministers/Voters. It is for the top civil servants to pick up the points raised by the Director of Audit, analyse the flaws that give rise to shortcomings (in the case of revenue collections) and abuses (in the case of expenses undertaken or not undertaken on time or undertaken in such a manner as to result in wasteful duplication of expenses). The initiative for proposing corrective actions should come from the top civil servants who should implement them unless not endorsed explicitly by the Ministers. Those top civil servants should stand at a distance from the scene of action for them to be in a position to judge wrong-doing where it occurs; they will never identify flaws, in a manner of self-indictment, as it were, if they were themselves busy stirring the cauldron. Where the wasteful malpractices persist in the case of the government, the matter is eventually taken to the voting public for sanction, it being given that governments rarely go bankrupt as do misgoverned companies.

The procedure is more or less the same in the case of parastatal bodies, except that in these cases, the corrective action proposed by the public servants employed by those institutions has to be endorsed by the Boards of the parastatal bodies. In such cases, the Minister comes in but not as directly as it is the case in central government. The boards are of course accountable to their Ministries but less directly so than in the case of central government departments. Thus, the boards of parastatals are more prone to abusive decisions despite receiving the right recommendations from the management for corrective action. Sometimes, certain presidents of boards of parastatal bodies can act abusively giving the impression to their fellow board members that they would be acting with the approval of the concerned ministers. There have also been numerous cases where the management of such bodies have demonstrated a knack for taking abusive decisions despite receiving the right recommendations from the Board. The relative distance and indirect route of such bodies from the seat of direct governmental control in such cases typically gives rise to serious abuse of the public purse. It is often too late when the cat is out of the bag: abusing presidents/board members/senior management officers are no longer in place or are unlikely to be held accountable for their wrongful actions or have been superseded in the direction of abuse by even more corrupt successors enjoying some kind of immunity from sanction.

So, what does one do? Go on piling up annual audit reports, even if they drew attention to aggravating cases of abuses? Accept the reproaches of malpractices to which attention is being drawn as if they were matters of routine? Set up the resulting inaction against the lapses pointed out as a local trade mark for governance? All this will be very distant from Singapore, which is understood to be the place whose good practices we are hoping to model ourselves on. Action is therefore called for to arrest the waste of public funds. Action can only be taken effectively if the responsibility for seeing to it that what ought to be done correctly is laid down specifically on the shoulders of clearly identifiable individuals. So long as a certain vagueness is entertained by hierarchical structures on who exactly should be held to account if things misfire, it will be impossible to stop abuses in the public sector. We are witnessing something akin to this as the MedPoint case drags on into its sixth month of investigation: you cannot fix upon the mainspring of the abuse if any. We have had enough of this and it is time to give direction as to how things will be in the future before the money of the public is directed to a wasteful employment.

First, it should be made clear right from the beginning as to who picks up the buck when things go wrong. Where timely decisions have not been taken, resulting in wasteful public expenditures or unwarranted escalation of costs or preference being selectively given in the attribution of contracts to contractors who fleece the tax-paying public the most, the ultimate decision-maker of the process should be clearly identifiable. Second, one cannot get away from punishment for under- or wrongful-performance on public contracts and expenditures. It is when exemplary sanctions are made to apply actually that the tide of abuse will start being stemmed. Lawmakers have to explicitly set down severe sanctions to follow for deliberate slippage in the execution of public duties.

It should be made clear to persons being appointed to the governing bodies of parastatals that their liability for wrongful actions and/or decisions will not be limited in time and sanctions/disqualification from holding any public office/directorships in future should form part of the set of corrective actions to be taken. Consequently and third, only persons of proven skills and abilities in the area of concern of each parastatal body should be appointed to chair its governing body. This requires getting the best available brains as a way of improving Mauritius’ public governance system along with board members better known for their world class competence in the relevant fields and their proven integrity instead of their clan affiliations. Fourth, who can decide to follow this route for stopping the kinds of abuses pointed out in the Audit Report? It is only those who can come up with clean hands that can do so. Those who do not fear that their own future channels of potential abuse will be foreclosed by taking the right real action that the current situation demands are qualified to start this initiative of defining a new regime of effective selection of office bearers and sanctioning of misbehaviour in the conduct of public affairs. Let those who can stand up to this standard of proof come out! The sooner, the better!

M.K.

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