Parly must take decisive action on public enterprises

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Proceedings in the National Assembly last week witnessed very good debate on the Grain Marketing Board (GMB) and Premier Services Medical Aid Society (PSMAS).

What I liked about the debate is that, members across the political divide were united in condemning the rot at these enterprises, which is a mirror of what is generally happening in terms of financial management in the public sector.

The Public Accounts Committee (PAC) on November 19, tabled a report that examined the GMB value for money audit report and audited accounts for the three-year periods 2011/2012, 2012/2013 and 2013/2014. The main issue of concern to the committee is that the GMB continues to receive qualified audit reports from the Auditor-General based on the same issues. The issues include internal control systems that are in shambles and absence of sound corporate governance procedures. Surely, in this day and age how can an enterprise still continue to use manual accounting systems and cannot even segregate duties in its financial systems and procedures?

The recurrence of the same issues reflects either failure or unwillingness to implement the Auditor-General and the PAC’s recommendations.

The GMB board and its management must simply be relieved of their duties if they are not capable of implementing the recommendations. A strategic enterprise like GMB cannot be run by people without the necessary capacity to deliver.
Unwillingness to implement the recommendations is tantamount to serious insubordination that warrants instant dismissal. I would have expected the PAC to make such a recommendation in their report to the House.

I would like to quote legislator Dexter Nduna (Zanu PF), whom I believe hit the nail on the head, when it comes to the role of Parliament in exercising its oversight constitutional mandate over the public sector. He said: “The issues to do with late inputs, late payments and lack of corporate governance that we were told here should be a thing of the past, especially if that has been brought here to Parliament. Parliament should be taken seriously and Parliament should be the custodian of all board positions. We should be the place that appoints boards. As we speak, boards are appointed along corrupt tendencies, collusion tendencies and nepotism. What we need is co-ordination, co-operation and networking and it should be brought here to Parliament. If we are not able to appoint boards, then we are a nation which is not in a hurry. We are not able to be custodians of our own institutions and we are not able to be in control of our own institutions, in particular the most critical institution like GMB.”

I fully concur with Nduna’s sentiments because section 119 of the Constitution is explicit that the State and all institutions and agencies of government, at every level, are accountable to Parliament. We cannot continue to have a situation whereby a minister is the only one mandated with appointing the board members for public enterprises. The system is devoid of checks and balances. Parliament, through its portfolio committee system, must vet these people and have the last say on who is appointed.

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The current system is rewarding mediocrity. How can one justify continued existence of a GMB board that has been receiving qualified reports year-in and year-out? It is even more worrying when the same board members continue to hold office, when their term office has expired and in complete violation of the Grain Marketing Board Act.

Good corporate governance requires the implementation of a performance evaluation system for board of directors. It is unheard of that board members can serve for nearly 10 years without their performance being evaluated. Such a state of affairs breeds in laxity, cronyism, corruption and resistance to change.

Parliament must be guided by the Constitution in enforcing good corporate governance and financial practices in public enterprises. Section 195 of the Constitution requires companies and other commercial entities owned or wholly controlled by the State to comply with the basic values and principles governing public administration. They are also required to conduct their operations so as to maintain commercial viability and abide by generally accepted standards of good corporate governance.

Section 197 gives Parliament an option to enact legislation that limits the terms of office of chief executive officers or heads of government-controlled entities and other commercial entities and public enterprises owned or wholly controlled by the State. This legislation is long overdue, given the stinking rot in enterprises such as GMB, NSSA and PSMAS.

Section 198 obliges Parliament to enact legislation with measures to enforce good principles of public administration and leadership. These measures must require public officials to make regular disclosures of their assets, establish codes of conduct to be observed by public officials, specify the standards of good corporate governance to be observed by government-controlled entities and provide for the disciplining of persons who contravene the constitutional provisions of good public administration and leadership or any code of conduct for public officials.

Parliament must speedily enact this law if the legislative branch is to have some teeth in overseeing the work of the Executive branch. Decisive action by Parliament is now needed. Endless motions and debates that are not acted upon will not take us anywhere.

l John Makamure is the Executive Director of the Southern African Parliamentary Support Trust. Feedback: john.makamure@gmail.com