UCLG Africa 2017
CORRUPTION IN LOCAL GOVERNMENT IN SOUTH AFRICA AND BRAZIL: LESSONS FOR AFRICA
UCLG Africa 2017 Professor EVANGELOS MANTZARIS Anti-Corruption Centre for Education and Research of Stellenbosch University School of Public Leadership Stellenbosch University, South Africa
Municipalities are administrative divisions of the state in Brazil. The country has 5,570 municipalities, making the average municipality population 34,361. The average state in Brazil has 214 municipalities. Roraima is the least subdivided state, with 15 municipalities, while Mina Gerais is the most subdivided state, with 853.
UCLG Africa 2017 Brazilian municipal governments are entrusted with the power to implement collective decisions (regarding federal policies), and this implementation must be guided by the norm of inclusion. This inclusion is broken when municipal officials deviate from the norms, laws and expectations of their positions:
UCLG Africa 2017
CORRUPTION ‘the behaviour which deviates from the formal duties of a public role because of private regarding, pecuniary or status gains, or violates rules against the exercise of certain types of privateregarding influence“.
UCLG Africa 2017 THE KEY CAUSES: Collective decisions are entrusted to a group or individual; There are rules that regulate how the group/individual can use their power to make these decisions (in a democracy this is the inclusive rule); The group/individual breaks this rule; Breaking the rule benefits the individual/group and harms the community.
UCLG Africa 2017 Failures related to poor management – which point to managerial incapacity and waste of resources – and those related to corruption involve a dimension of social exclusion, since both failures prevent citizens from accessing public goods and services to which they are entitled.
UCLG Africa 2017 The boundary that separates corruption from mismanagement is the political aspect of the exclusion. Corruption generates a private benefit which is, from a democratic point of view, illegitimate for benefiting some at the expense of decisions made by the political community. CGU (Comptroller General of Brazil) reports the justifications given by the mayors for the irregularities found. The analysis of the reports makes it possible to divide the irregularities into those that can be publicly justified and those that cannot (classified as corruption).
UCLG Africa 2017 It is common for the municipal administrations to conduct bidding processes without following all the formalities predicted by the specific Law. A Mayor withdrew all the money from the municipality bank account and disappeared . In Brazil it is difficult to compare irregularities related to corruption with those related to mismanagement.
UCLG Africa 2017
In Brazil’s local municipalities, the most reported and recorded cases of corruption take place through the operations of ‘mediators’ that deal with politicians and/or administrators in the supply chain and procurement sections. There are cases of a Renault Traffic purchased as an ambulance priced at approximately $4,000-6000 per purchase.
UCLG Africa 2017 Despite the belief that the Comptroller General of Brazil (CGU) has become efficient in inspecting municipal finances, one of the most important cases they managed to solve was the mediators’ involvement in a well-planned national syndicate ambulance peddling scheme.
UCLG Africa 2017
Such corruption is difficult to detect as it takes both a shallow as well as broad angle perception because initially it does not cause alarm. This implies that in many instances it is widespread and whistle-blowers are rare because they fear for their jobs and lives. It was of notable success because it was a massive scheme.
UCLG Africa 2017 The mediators and parliamentary staff colluded with ‘cooperative’ mayors who were instrumental in facilitating federal budget amendments that led the same group of companies winning all municipal tenders for ambulances at approximately 120 per cent above the market price .This corruption cycle had to be investigated by the federal police. Unfortunately, to date, there has been no outcome. This scheme took place in 19 of the 26 states in the country.
UCLG Africa 2017 This was a somewhat mediating operation utilising supply chain management and procurement manipulation and political connectivity and the active participation by a number of companies that were exposed in the investigation for supplying high overpriced ambulances to a large number of municipalities.
UCLG Africa 2017 The ‘connected’ conspirators in the system shared the circulated kickbacks. Over 300 mayors were directly involved. Parliament ordered that proceedings against and impeachment of 69 federal deputies and three senators. This remains unresolved. What are the effects of ‘re-writing’ manipulated books, falsifying budget outcomes and continuous break-ins at municipal council establishments from which computers, laptops, cell phones and official documents are stolen and never recovered ?
UCLG Africa 2017 There is also evidence showing of corrupt leaders who escape the law because they are considered ‘capable’ of delivering services to the people despite their illegal deeds and illegal transactions. It has been said that corruption is unpopular but politicians who are active and satisfy the needs of people are popular irrespective of their behaviour.
UCLG Africa 2017 In South Africa corruption in municipalities takes different forms: There are problems with the political administrative interface, and cadre deployment; poor financial management; weak civil society formations, and insufficient municipal capacity due to a lack of scarce skills .
UCLG Africa 2017 In the last financial year the Auditor General found that irregular expenditure had increased by just over 50% since the previous year to R16,81 billion – the highest since tracking the values begun. The amount could be even higher, as a third of the municipalities disclosed that the full amount was not known and 24% were qualified as the amount they disclosed was incomplete.
UCLG Africa 2017 Fruitless and wasteful expenditure was 21% lower in 2015-16 than in the previous year at R901 million, but unauthorised expenditure remained almost at the same level as in the previous year at R12,77 billion. In total, 55% of the overspending related to non-cash items – in other words, estimates of depreciation or impairment that were not correctly budgeted for. THE REASONS
UCLG Africa 2017 The SCM of the South African public service is governed by more than 80 different legal instruments. A careful study of the legislative and regulatory public service terrain shows conclusively that the country’s public sector SCM framework is characterised by multiple fragmentation which is a major obstacle to a municipal oversight, assessment and evaluation, a factor that has become over the years a serious hurdle to effective and efficient service delivery.
UCLG Africa 2017 Despite the fact that the post-apartheid government has introduced a wide-ranging anti-corruption measures, research has shown that in local government supply chain management (SCM) has been one of the organisational components where corruption is a serious threat. This means that the attempts of the government to regulate operational and organisational imperatives and guidelines on foundations of ethical requirements, transparency and accountability have been largely unsuccessful.
UCLG Africa 2017 OTHER REASONS: • • • •
Lack of commitment from Senior Management. No database of corrupt officials. Lack of investigative capacity within departments. Lack of proper management systems to monitor or deal with corruption e.g. nepotism in the local government institutions • Individual units not working as teams across municipalities. • Lack of cooperation with other sectors - business and civil society. • Lack of dedicated personnel in some departments to manage anticorruption.
UCLG Africa 2017 • Departments do not have capacity to deal effectively with cases referred from the NACH (National AntiCorruption Hotline) or the Municipal one. • No proper guidelines for sentencing civil cases of corruption. • Non/blacklisting of business and individuals charged with corruption. • No Provincial and Municipal Policy or protocol on Financial Disclosures. • Loose financial systems and risk management
UCLG Africa 2017 The anti-corruption mechanisms in place are not well-supported by national government or sufficiently institutionalised, due to the absence of post-intervention measurement of improvement, and the weak application of inter-governmental checks and balances, i.e. the oversight and review process by the Minister, and the Provincial Legislatures
UCLG Africa 2017 There are problems such as political infighting, conflict between senior management and councillors and human resource management issues, together with inadequate revenue collection, ineffective financial systems, fraud, and misuse of municipal assets and funds.
UCLG Africa 2017 Protection for whistle-blowers creates a culture of exposing wrong doing. While the Protected Disclosures Act (2000) provides some protection, the question is … Are whistle-blowers provided with adequate protection??? The percentage of people who identify themselves as prepared to “blow the whistle” has dropped … the legislation has several weaknesses (National Development Plan).
UCLG Africa 2017 The scope of protection in the law is too narrow. Opinions vary about what constitutes “adequate protection” People are discouraged from blowing the whistle…the confidentiality of their identity is also not guaranteed. People have lost their lives….some of them have been dismissed, victimised, suffer emotional and psychological stress.
WHAT AFRICA CAN LEARN • A holistic approach in the fight against corruption is three fold. • The first deals with the full extent and scope of the corruption that takes place in a public sector institution. This includes explanation as to causes and types of corrupt activity. • It is important to understand the human behavioural element and psychological and sociological considerations.
UCLG Africa 2017 The second part is concerned with combating corruption. It deals with “defensive” anticorruption measures. This includes codes, laws, institutions, financial management systems, personnel systems, governance systems and other best practices and methods as a crucial dimension of the organisation’s anti-corruption PLAN
UCLG Africa 2017 The third part deals with the “offensive” measures to combat corruption. This constitutes a more defined and focused anti-corruption initiative within the organisation. “Offensive” measures, deal with how to respond to risks, how to detect and discover fraud and corruption, how to recognise the suspicious situations.
UCLG Africa 2017 • NO FIGHT AGAINST CORRUPTION CAN BE SUCCESSFUL WITHOUT POLITICAL WILL • Tackling fraud and corruption, especially in relation to the procurement system and contract management; • Strengthening and tightening the regulatory regime dealing with anti-corruption and supply chain management; • Ensuring the application of maximum penalties in relation to all incidents of corruption; • Protect whistle-blowers.
UCLG Africa 2017 • • • •
Adopt STRICT Codes of conduct Empower Financial disclosures Activate Acceptance of Gifts policy Continuous comprehensive education, training and awareness. • Coordination amongst all Government layers • Continuous risk assessment • Expressed in terms of measurable and time-bound implementation targets
Thank You