Review of the Public Audit Act Ms Fatima Ebrahim Parliamentary Legal Adviser 8 September 2017

Overview Process for introduction of amendment Bill Preliminary Comments on the draft amendment Bill The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

Procedure to introduce a committee bill First House (1) No NA Rule Activity 1. 268(1)(a) The Committee requests permission from the NA to introduce a draft Bill. 2. 273(1) Permission is sought in terms of Rule 268(1), which provides that the Committee must table in the Assembly a memorandum which — (a) sets out particulars of the proposed legislation; (b) explains the objects of the proposed legislation; (c) states whether the proposed legislation will have financial implications for the state and, if so, gives an account of those implications; and (d) sets out the views of the executive on the objects of the proposed legislation. The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

First House (2) No NA Rule Activity 3. 273(3) (3) The Assembly may — (a) give permission that the proposed legislation be proceeded with; (b) refer the proposed legislation back to the committee for reconsideration; or (c) refuse permission. 4. 273(4) (4) If the Assembly gives permission that the proposed legislation be proceeded with, it may, if it so chooses — (a) express itself on the desirability of the proposed legislation; or (b) subject its permission to conditions. The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

First House (3) No NA Rule Activity 5. 274(1)(a) The Committee prepares a draft Bill – after permission from NA (capacity has been created in the Parliamentary Service to assist the Committee). 6. 274(1)(b) The committee consults the JTM for advice on classification of the Bill. 7. 276(1)(b) and (c) Notice of the intention to introduce is given in the Government Gazette, together with a copy of the Bill or an explanatory summary of the Bill. 8. 276(4) 275(a) and (b) - If a copy of the Bill is published in the Government Gazette, the notice must contain an invitation for interested persons and institutions to submit written representations on the Bill. - Interested persons must be given at least three weeks after publication to comment. - Relevant Department / Organ of State must be given sufficient opportunity to make submissions to the Committee. The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

First House (4) No NA Rule Activity 9. 274(3) The Committee must report to the House when it publishes the draft Bill. 10. s59(1)(a) Constitution Any written comments received must be considered. It is required that Parliament provides “meaningful opportunities for public participation in the law-making process.“ 11. 275(d) The Committee may, in view of any comments received, make amendments to the draft Bill before its introduction. 12. 275(c) The Committee consults the JTM for advice on classification of the Bill in the form that it will be introduced (final Bill).

First House (5) No. NA Rule Activity 13. 279(4) The Bill must be certified by the Chief Parliamentary Legal Adviser or a Parliamentary Legal Adviser designated by him or her as being consistent with the Constitution and existing legislation; and properly drafted in the form and style. 14. 279(1)(a) and (c) The Committee introduces the Bill by submitting a copy thereof and a supporting memorandum to the Speaker. 15. 280(3) The findings of the JTM as per NA Rule 275(c) is tabled with the Bill when it is introduced. 16. 282(1) 290(2)(b) The Bill does not have a first reading – instead it is placed on the order paper for Second Reading. At least three Assembly working days must elapse since the Bill was introduced before the Second Reading.

Second House Activity The Bill is transmitted to the NCOP and referred to a Committee Committee deliberations Report to the Second House Consideration by Second House

Comments on proposed amendments Clause in Bill Section in PAA Comments 1 Amending section 1 by inserting new definition of “disallowance” Definition is extremely broad. Neither the definition not the substantive provision in 5(1D) actually define what a disallowance is. What is expenditure that is contrary to law? Does it refer to irregular, unauthorised and fruitless and wasteful expenditure? Should this not be stated fully? Amending section 1 by inserting new definition of “nominated account” Definition is extremely broad. Neither the definition not the substantive provision in 5(1F)(b) indicate how discretion as to regard to the nominated account is to be exercised. Consider s13 of the PFMA which provides that funds received by the AG do not have to be deposited into the National Revenue Fund. The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

Comments on proposed amendments Clause in Bill Section in PAA Comments 1 Amending section 1 by inserting new definition of “surcharge” Term is commonly understood as a fee or an additional charge either in relation to goods or services or in the context of a tax regime. What in fact is envisaged by the Bill is the recovery of a loss suffered due to non-compliance with procurement or financial prescripts. S77 of the Constitution – money bill is a bill that imposes surcharges. Falls within the exclusive domain of the Minister of Finance. 3 Amending section 5 by inserting new clause (1A) and (1B)(b) Making regulations for purpose of conducting an investigation – no reference to section 52(1) of the PAA – for consistency a reference should be included. The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

Comments on proposed amendments Clause in Bill Section in PAA Comments 3 Amending section 5 by inserting new clause (1C) relating to surcharges Section 38(1)(c)(ii) of the PFMA requires an accounting officer to take effective and appropriate steps to prevent irregular expenditure. The accounting officer must in terms of section 38(1)(c)(i) take effective and appropriate steps to collect all money due to the institution. Is the proposal therefore not a duplication of powers and ultimately resources? Where does responsibility lie for recovery of losses? How does this tie into disciplinary processes i.t.o the PFMA ? Constitutes administrative action and therefore provisions of Promotion of Administrative Justice Act,2000 applies. Consider whether there is a disconnect as regards procedural steps and time frames (e.g appeal within 60 days as provided for in (1F) (c). Practical concerns- apportionment of blame where several officials may be liable for loss, capacity constraints, costs etc The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

Comments on proposed amendments Clause in Bill Section in PAA Comments 3 Amending section 5 by inserting new clause (1F) (b) 60 day period for payment of surcharge may be unreasonable/impossible to comply with in certain circumstances. Does the surcharge attract interest after such period? Payment arrangements/agreements are dealt with in(1F) (e) (ii) but not tied into this provision as an exception. 3 Amending section 5 by inserting new clause (1G) Is this purporting to create an additional layer of liability for surcharges ? When will the AO be held responsible vis-à-vis an official being held responsible. Clarity required as to whether this is an election in terms of who to surcharge. If that is not the intention why is a separate provision required? The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.

THANK YOU The time frame given with regards to the first step takes into account the following: The time to prepare the memorandum in the committee, for the memo to be ATC’ed, then for it to be heard in the House.