Inconsistent laws a public-sector headache when recovering irregular expenditure

The public sector’s struggle to recover irregular expenditure is hamstrung by inconsistent laws. Public-sector specialist Helen Venter unpacks the problem in this month’s SmartProcurement.

For the past three years, the Auditor General of South Africa has complained about the lack of consequence management against accountable officials for incurring irregular or fruitless and wasteful expenditure. The Public Finance Management Act (PFMA) of 1999 is very clear that such expenditure must be recovered from the person liable in law, unless the expenditure is condoned.

The problem, however, is that the recovery process mandate is vested in the Accounting Officer in terms of the PFMA, whilst the disciplinary process to determine liability in law is executed by the Executive Authority in terms of the Public Service Act (PSA) of 1984.

Therefore, any application is challenged owing to inconsistent provisions between the laws.

In practice
The recovery process for incurred irregular or fruitless and wasteful expenditure requires a prescribed labour process be instituted against one or more officials to determine their liability in law. However, the current processes and documentation, such as the charge sheet and subsequent sanction, do not address the matter of recovery when found guilty.

This results in a situation that recovery cannot be instituted against such officials as they have already been sanctioned, and once sanctioned cannot be held liable for recovery owing to the doctrine of double jeopardy.

Double jeopardy
The Bill of Rights in the Constitution of South Africa forbids a retrial when there has already been an acquittal or conviction. The Constitution [in s. 35(3)(m)] provides that:

Every accused person has a right to a fair trial, which includes the right not to be tried for an offence in respect of an act or omission for which that person has previously been either acquitted or convicted.

This right forms part of the comprehensive right to a fair trial and provides a guarantee against being ‘put twice in jeopardy’; or the principle that ‘no man ought to be punished twice for the same offence’ which had its origins in the ecclesiastical concept that ‘God judges not twice for the same offence’.

The doctrine of double jeopardy in the South African labour context stipulates that an employer may not subject an employee to a second disciplinary action after a final decision was reached at an earlier disciplinary proceeding. Moreover, the rule prohibits multiple sanctions for the same misconduct. Generally, it is unfair of an employer to subject an employee to a second disciplinary enquiry for the same alleged misconduct to gain a more acceptable result before a different chairperson than in the first enquiry.

In examining double jeopardy, it is evident that:
– It is a doctrine entrenched in the SA Constitution and, therefore, relevant to public sector officials
– The public sector may only reconsider/revisit a disciplinary sanction against an official of a properly constituted disciplinary committee when it is fair to do so. This is only fair in exceptional circumstances, typically because of new and compelling evidence
– The public sector is, therefore, not automatically entitled to change a sanction imposed against an official for incurring an irregular or fruitless and wasteful expenditure, by additionally starting recovery claims against the official if such a claim does not form part of the initial charge and sanction.

The above inconsistent application between legislation prevents timely recovery of irregular or fruitless and wasteful expenditure, which results in a negative perception on government’s ability to ensure effective consequence management.

Proposed solution
The most effective solution would be if the Accounting Officer and the relevant Human Resources Department dealing with labour and disciplinary matters develop and issue a joint Standard Operating Procedure for managing treating irregular or fruitless and wasteful expenditure, including a ‘determination of liability in law’ procedure.

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