Commission calls on government to rein in contractors

Monday, June 4, 2018

The Financial and Fiscal Commission (FFC) says government must exercise stronger oversight by imposing a clear, measurable evaluation framework for consultants and contractors to improve service delivery. 

The commission’s chairperson, Professor Daniel Plaatjies, said this when he briefed the media on the commission’s annual submission for the division of revenue for 2019/20 at the Imbizo Centre in Parliament on Monday.

Plaatjies said during this time of fiscal austerity, better contract management should be implemented to ensure value for money for services procured and to also avoid fluctuation of costs and to measure clear deliverables. 

He said in instances where there is service delivery failure, penalties should be invoked and there should be consequential accountability to ensure that service providers are held to account. 

“In addressing the potential for misappropriation during the procurement and implementation stages of infrastructure delivery, the commission recommends that a clear, measurable evaluation framework be added to conditional grants frameworks in the Division of Revenue Bill. 

“Holding the implementing agent accountable for funds spent will more closely align to sector department objectives. Particular scrutiny must be exercised over contract variation orders,” he said. 

The commission found that widespread inefficiencies in infrastructure delivery across the three main infrastructure sectors of health, education and road maintenance existed. 

To improve this, Plaatjies said there must be more efficient contract management within government departments and should this not happen, disciplinary steps must be taken internally, while civil or criminal charges must be laid externally. 

National government should play monitoring, evaluation role over provincial, local spheres 

Research conducted by the commission found that national government is not necessarily better at delivering sub-national services than sub-national government itself. 

“The commission recommends that government should not automatically increase the role of government itself. 

“The nature and design of intergovernmental fiscal instruments should be aimed very specifically at improving service delivery in the attainment of national priorities, rather than tools to support consolidation efforts during these times of fiscal stress. 

“Government must rather focus on supporting sub-national programme implementers and on monitoring and evaluation,” he said.   

The commission’s research also found that there was a reduced dependency on transfers as the main driver of expenditure and revenue for municipalities, particularly in metropolitan areas and secondary cities.

This was not the case with the rural and more vulnerable municipalities. 

“However, for smaller and rural municipalities, reduction in transfers significantly correlate with less financing of capital and operating budgets. 

“The commission recommends that intergovernmental transfers strike a balance between the need to enhance fiscal autonomy through reduced transfers on the one hand, and the important stimulus that increasing conditional grants provides for funding capital expenditure in fiscally vulnerable municipalities on the other,” Plaatjies said. 

He said more flexibility must be built into the grants of smaller municipalities and that grants should also incentivise municipal effort to increase their revenue. –