university of south africa (unisa) abstract

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PROCUREMENT CHALLENGES IN THE SOUTH AFRICAN PUBLIC SECTOR

INTAHER M AMBE* JOHANNA A BADENHORST-WEISS

University of South Africa (Unisa)ABSTRACT

This article reports on an exploration of challenges experienced in the field of

procurement within the South African public sector. To institute procurement best practices,

a supply chain management system was adopted in South Africa in 2003. The procurement

process was granted constitutional status and has been used to address past inequitable policies

and practices. It promotes aims which are, arguably, secondary

to the primary aim of procurement. For the exploration, a conceptual analytical approach

was employed and some of the key guiding pillars of public procurement in South Africa

divulged. The challenges restraining effective and efficient implementation

of public procurement are also revealed. The article concludes by recommending

the development of competency through customised (separate) training materials and

programmes, the involvement of stakeholders in the bidding process and the employment

of good strategic sourcing practices.

INTRODUCTION

Public procurement operates in an environment of increasingly intense scrutiny driven by technology, programme reviews, and public and political expectations for service improvements (Bolton, 2006; Eyaa & Oluka, 2011). Currently, in South Africa, procurement is of particular significance in the public sector and has been used as a policy tool due to the discriminatory and unfair practices during apartheid (Bolton, 2006). Procurement is central to the government service delivery system, and promotes aims which are, arguably, secondary to the primary aim of procurement such as using procurement to promote social, industrial or environmental policies (Cane, 2004). Prior to 1994, public procurement in South Africa was geared towards large and established contractors. It was difficult for new contractors to participate in government procurement procedures. However, public procurement in South Africa has been granted constitutional status and is recognised as a means of addressing past discriminatory policies and practices (Bolton, 2006: 193).

Reforms in public procurement in South Africa were initiated to promote the principles of good governance, and the National Treasury introduced a preference system to address socio-economic objectives. The reform processes were due to inconsistency in policy application

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Procurement Challenges in the South African Public Sector

and the lack of accountability and supportive structures as well as fragmented processes. Matthee (2006: 65) asserted that a uniform implementation approach to procurement was required, due to a research study on opportunities for reform processes in the South African government (2000) conducted by the Joint Country Assessment Review (CPAR) and the World Bank in 2001. The deficiencies and fragmentations in governance, interpretation and implementation of the Preferential Procurement Policy Framework Act (PPPFA) Act No 5 of 2000, resulted in the introduction of supply chain management (SCM) in the public sector as a policy tool (National Treasury, 2005: 8). In 2003, a SCM document entitled ‘Supply Chain Management: A guide for accounting officers/authorities’ was developed to guide the adoption of the integrated SCM function and its related managerial responsibilities (National Treasury, 2005: 5). This was government’s attempt to achieve the desired strategic policy outcomes through public procurement (McCrudden, 2004: 257).

Despite the reform processes in public procurement and the employment of SCM as a strategic tool, there are predicaments in South African public procurement practices, for example non-compliance with procurement and SCM-related legislation and policies as well as tender irregularities (Smart Procurement, 2011). According to De Lange (2011), ‘Taxpayers were fleeced of R30 bn. Corruption, incompetence and negligence by public servants’ were to be blamed. The South African government spent R26.4 billion in 2010 in ways that contravened laws and regulations (Smart Procurement, 2011).

Against this background, two very important questions can be asked:1. What are the procurement challenges in the South African public sector?2. How can public procurement in South Africa be improved?

Possible answers to these questions are discussed in the rest of this article.

RESEARCH METHOD

This article is of an exploratory nature and involves a conceptual analytical approach. Conceptual analysis is a technique that treats concepts as classes of objects, events, properties or relationships (Funer, 2004: 233). The technique involves defining the meaning of a given concept precisely by identifying and specifying the conditions under which any entity or phenomenon is (or could be) classified under the concept in question. Conceptual analysis is used in order to get a better understanding of procurement practices in the South African public sector. The study on which this article is based reviewed relevant literature sources on public procurement. Also, pertinent procurement policy documents from the National Treasury website, newspaper reports as well as other research documents relating to procurement in the South African public sector were reviewed and analysed. In light of the method discussed, the study examined: (1) the nature of public procurement,

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(2) public procurement practices in South Africa, (3) the challenges of public procurement in South Africa, and (4) the way forward for public procurement in South Africa.

THE NATURE OF PUBLIC PROCUREMENT

Public procurement has its origins in the fiduciary obligation of government administrations to deliver goods and infrastructure, for example roads and harbours and services, for example health care and education to the population of a country or a specific geographic region, city or town (Odhiambo & Kamau, 2003: 10). Public procurement refers to the government activity of purchasing the goods and services needed to perform its functions (Arrowsmith, 2010: 1). According to Odhiambo and Kamau (2003: 10), public procurement is broadly defined as the purchasing, hiring or obtaining by any contractual means, goods, construction works and services by the public sector. It involves the purchase of commodities and contracting of construction works and services if such acquisition is effected with resources from state budgets, local authority budgets, state foundation funds, domestic loans or foreign loans guaranteed by the state, foreign aid and revenue received from the economic activity of state. According to Hommen and Rolfstam (2009), public procurement is ‘the acquisition (through buying or purchasing) of goods and services by government or public organizations’. Arrowsmith (2010: 1) contends that the concept of public procurement can be referred to as procurement planning, contract placement and contract administration.

Based on the above discussion, public procurement can be defined as follows:Public procurement is the function whereby public sector organisations acquire goods, services and development and construction projects from suppliers in the local and international market, subject to the general principles of fairness, equitability, transparency, competitiveness and cost-effectiveness. It includes many activities that support the service delivery of government entities, ranging from routine items to complex development and construction projects. It also directly or indirectly supports government’s social and political aims.

Besides the fiduciary obligation to deliver goods and services to the constituents of the particular government administration, public procurement addresses a wide range of objectives (Uyarra & Flanagan, 2009: 2). It has been used by governments to achieve socio-economic objectives such as stimulating economic activity; protecting national industries from foreign competition; improving the competitiveness of certain industrial sectors; and remedying national disparities (Bolton, 2006; Thai, 2006). The objectives of public procurement are achieved through various means, and legal and regulatory rules on conducting public procurement (Arrowsmith, 2010: 4).

Public procurement is the sheer volume of funds channelled through government procurement and is the largest single buyer in most countries (OECD, 2007: 1). The size of

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public procurement varies between 5% and 8% of the gross domestic product (GDP) in most industrialised countries (OECD, 2007: 1). In the Middle East and Africa, central government purchases range from 9% to 13% (Gul, 2010: 1). This indicates that public procurement plays a vital role in a country (Odhiambo & Kamau, 2003: 10). Public procurement has important economic and political implications, and ensuring that the process is economical and efficient is crucial. This requires in part that the whole procurement process should be well understood by the actors: government, the procuring entities and the business community/suppliers and other stakeholders, including professional associations, academic entities and the general public (Odhiambo & Kamau, 2003: 10).

Public procurement is increasingly recognised as a profession that plays a key role in the successful management of public resources, and a number of countries have become increasingly aware of the significance of procurement as an area vulnerable to mismanagement and corruption and have thus made an effort to integrate procurement into a more strategic view of government efforts. As part of the efforts to adopt a long-term and strategic view of their procurement needs and management, most countries have resorted to using their annual procurement plans as a possible problem solver (Mahmood, 2010: 103).

After reviewing public procurement in general, the discussion now moves to public procurement in the South African public sector.

PUBLIC PROCUREMENT IN SOUTH AFRICA

Immediately after taking office in 1994, the new South African government initiated a series of budgetary and financial reforms on procurement. The intention of the procurement reforms was to modernise the management of the public sector, to make it more people-friendly and sensitive to meeting the needs of the communities it serves.

Background to procurement reforms

Procurement reforms in South Africa started in 1995 and were directed at two broad focus areas, namely the promotion of principles of good governance and the introduction of a preference system to address certain socio-economic objectives. The procurement reform processes were embedded in Section 112 of the Municipal Financial Management Act No 56 of 2003 (MFMA) and Section 76(4) (C) of the Public Finance Management Act No 1 of 1999 (PFMA) and the Preferential Procurement Policy Framework Act No 5 of 2000 (PPPFA). In 2001, the National Treasury completed a joint CPAR with the World Bank to assess procurement practices throughout the public sector. The CPAR identified certain deficiencies in the current practices relating to governance, interpretation and implementation of the PPPFA and its associated regulations (National Treasury, 2005).

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The systems of procurement and provisioning were fragmented owing to the fact that tender boards were responsible for procurement, whereas provisioning was largely underwritten by norms and standards in the logistics system driven by the National Treasury. Effective and efficient financial management in government was continuously questioned. Similarly, the logistics system as a tool for asset management raised concerns because of a lack of proper handling of movable assets in the government environment (Mkhize 2004: 4). The year 2003 saw the adoption of an SCM document entitled ‘Policy to guide uniformity in procurement reform processes in government’ in conjunction with provincial treasuries to replace the outdated procurement and provisional practices in municipalities. ‘Supply chain management: a guide for accounting officers of municipalities and municipal entities’ was also compiled to provide guidelines on the adoption of the integrated SCM function and its related managerial responsibilities assigned to accounting officers in terms of sections 62 and 95 of the MFMA. The guide explains how Chapter 11, part 1 of the MFMA, the municipal SCM regulations and the SCM policy of the council or board of directors can be adopted as an operational process for accounting officers to deal with each step of the SCM cycle. The principle behind the policy guide is that managers should be given flexibility to manage and ensure the constitutional requirements of transparency and accountability (National Treasury, 2005).

Management of public procurementIn South Africa, SCM is an important tool for managing public procurement. SCM is an integral part of prudent financial management in the South African public sector management (OGC 2005: 11). According to Hanks, Davies and Perera (2008), SCM operates within a regulatory framework set by the national government and extended by provinces and local government bodies to specific policies, legislation and regulations. The aim of SCM is to add value at each stage of the procurement process – from the demand for goods or services to their acquisition, managing the logistics process, and finally, after use, to their disposal. In so doing, SCM aims to address deficiencies in current practice relating to procurement, contract management, inventory and asset control and obsolescence planning. Adoption of an SCM policy thus ensures uniformity in bid and contract documentation, and options and bid and procedure standards, inter alia, will promote the standardisation of SCM practices (National Treasury, 2003).

The National Treasury regulations reinforce the provisions of the PFMA and MFMA, finalise the devolution of the SCM function to the accounting officer, and formalise the integration of various functions into a single SCM function. The National Treasury regulations provide the broad legislative framework for SCM by: • defining the various elements of SCM, such as demand management, acquisition

management, logistics management, disposal management and SCM performance• institutionalising the creation of a supply chain management unit in the office of the

chief financial officer

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• specifying the roles of the accounting officer in the management of the bidding process • providing for processes and procedures in the case of abuse of the supply chain

management system within a department • requiring the National and Provincial Treasury and municipal finance department to

establish a system to collect and report on the performance of the SCM system within their defined jurisdictions (National Treasury, 2005).

The legislation and regulations outline minimum requirements in the areas of supply chain and preferential procurement. National departments and provincial and local governments are allowed to extend and develop their policies, systems and structures within the ambit of the national regulatory framework (Hanks et al., 2008). Hence, to a large extent, public procurement is decentralised to departments, provinces and municipalities. Based on this decentralised structure, the National Treasury regulation stipulates that organs of state should establish three kinds of committee: bid specification, bid adjudication and bid award committees. Through this process of segregation of duties, greater efficiency and risk management is promoted. Some departments have decided to combine the bid specification and adjudication committees (Pauw, 2011).

Legislative framework for procurement

Section 217 of the Constitution of the Republic of South Africa Act No 108 of 1996 stipulates the primary and broad secondary procurement objectives, as indicated in Table 1. Section 217(3) of the Constitution requires that national legislation prescribe a framework within which the preferential procurement policy must be implemented. The PPPFA was promulgated in response to this constitutional imperative. Procurement by organs of state (national and provincial departments, municipalities, constitutional entities and public entities) is also governed by a number of other pieces of legislation. Table 1 indicates the objective of procurement in South Africa as contained in the Constitution.

Table 1: Public procurement objectives in South Africa as set out in the Constitution

Objective Reference

Primary Procurement system to be fair, equitable, transparent, competitive and cost effective

Section 217(1)

Secondary Procurement policy may provide for:1. categories of preference in the allocation of contracts and 2. the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination

Section 217(2)

Source: Pauw and Wolvaardt (2009, p.67); Bolton (2006, p.203); Watermeyer (2011, p.3)

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The PFMA (76[4] permits the National Treasury to make regulations or issue instructions applicable to all institutions to which the Act applies concerning ‘the determination of a framework for an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost effective’ (Watermeyer, 2011: 3). Also, the procurement provisions of the MFMA are similar to the provisions of the PFMA, but contain more detail on the system. Section 112 of the PFMA Act No 1 of 1999 permits the Minister of Finance to issue a prescribed regulatory framework for SCM that covers a number of specific issues. The SCM regulations issued in terms of the PFMA and MFMA Acts lay down the requirements for the governance of procurement processes and establish a high-level government policy. Each organ of state has to determine its own procedures and policies, which are consistent with the legislative framework (Watermeyer 2011: 3).

There are, therefore, numerous legislative frameworks that guide procurement practices. These include the: • Constitution• Public Finance Management Act 1 of 1999 • Municipal Finance Management Act No 56 of 2003• Preferential Procurement Policy Framework Act No 5 of 2000• Broad-based Black Economic Empowerment Act 53 of 2003 • Promotion of Administrative Justice Act No 3 of 2000• Promotion of Equality and the Prevention of Unfair Discrimination Act No 4 of 2000• Construction Industry Development Board Act No 38 of 2000• Prevention and Combating of Corrupt Activities Act No 12 of 2004, and so on (Migiro &

Ambe, 2008).

Table 2 summarises the Acts and their functions in procurement practices in South Africa.

Table 2: Primary Acts that regulate procurement Act What it does in respect of procurement

Public Finance Management Act 1 of 1999

Establishes a regulatory framework for SCM, which includes procurement in national and provincial departments and state-owned enterprises.

Promotion of Administrative JusticeAct 3 of 2000

Establishes fair administrative procedures, permits those affected by unfair administrative action to request reasons for such administrative action and requires administrators to respond to such requests. (Administrative actions are presumed to have been taken without good cause where an administrator fails to respond within the prescribed period.)

Provides for procedures for the judicial review of administrative actions and remedies in proceedings for judicial review, including the prohibition of an administrator from acting in a particular manner, setting aside the administrative action, correcting the defective action and ordering the administrator to pay compensation.

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The Promotion ofEquality and thePrevention of UnfairDiscrimination Act 4 of 2000

Prohibits the state or any person from discriminating unfairly against any person on the grounds of race or gender through the denial of access to contractual opportunities for rendering services or by failing to take steps to reasonably accommodate the needs of such persons.

Preferential ProcurementPolicy Framework Act 5 of 2000

Establishes the manner in which preferential procurement policies are to be implemented.

Construction IndustryDevelopment Board Act 38 of 2000

Establishes the means by which the Board can promote and implement policies, programmes and projects, including those aimed at procurement reform, standardisation and uniformity in procurement documentation, practices and procedures within the framework of the procurement policy of government, through the establishment of:1. a national register of contractors (and if required, consultants and suppliers)

to manage public sector procurement risk and facilitate public procurement;2. a register of projects above a financial value with data relating to contracts

awarded and completed and a best practice project assessment scheme;3. best practices

Establishes a code of conduct for the parties engaged in construction procurement.

Broad-based BlackEconomic EmpowermentAct 53 of 2003

Establishes a code of good practice to inform the:• development of qualification criteria for the issuing of licences or

concessions, the sale of state-owned enterprises and for entering into partnerships with the private sector; and

• development and implementation of a preferential procurement policy.

Local government:Municipal FinanceManagement Act 56 of 2003

Establishes a regulatory framework for SCM which includes procurement in municipalities and municipal entities.

Prevention andCombating of CorruptActivities Act12 of 2004

Makes corruption and related activities an offence; establishes a Register in order to place certain restrictions on persons and enterprises convicted of corrupt activities relating to tenders and contracts; and places a duty on certain persons holding a position of authority to report certain corrupt transactions.

Source: Adapted from Watermeyer (2011: 3)

Having dwelt on the status of public procurement in South Africa, the focus of the discussion now turns to the challenges faced with the implementation procurement in the South African public sector.

PUBLIC PROCUREMENT CHALLENGES IN SOUTH AFRICA

It is important to note that SCM is an integral part of procurement in the South African public sector. Therefore, it is used as a tool for the management of public procurement practices. However, despite the employment of SCM as a strategic tool, public procurement in South Africa still faces enormous predicaments. These include, among others: • lack of proper knowledge, skills and capacity• non-compliance with SCM policy and regulations

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• inadequate planning and the linking of demand to the budget • accountability, fraud and corruption• inadequate monitoring and evaluation of SCM• unethical behaviour• too much decentralisation of the procurement system• ineffectiveness of the black economic empowerment (BEE) policy.

These predicaments are briefly discussed below.

Lack of proper knowledge, skills and capacity

To fully achieve SCM objectives, the National Treasury provides support by facilitating the development of appropriate training materials to government departments, municipalities and municipal entities (National Treasury, 2005). However, the shortage of skills has been a re-concurrent theme in public discussion. According to Sheoraj (2007), skills and capacity shortages have been identified as the single greatest impediment to the success of public procurement in South Africa. Adequate capacity in the form of appropriate structures with fully skilled and professional SCM personnel is a key success factor for proper SCM implementation. In some government entities, the quality of SCM personnel’s skills and ability are well below standard. Migiro and Ambe (2008) assert that many SCM actors in the South African public sphere have attended a number of training workshops on SCM, but they still lack the appropriate knowledge for proper implementation. McCarthy (2006) contends that there is a lack of capacity and knowledge by SCM actors to handle procurement processes that have led to bad governance. The South African government embarks on programmes that educate practitioners, but implementation of its programmes always falls short.

Non-compliance with policies and regulations

SCM is guided by a number of related policies and regulations (National Treasury, 2005). Compliance with these policies and regulations is a problem. As indicated by Matthee (2006), some of the practices relating to non-compliance with the rules and procedures relate to the tendency not to utilise a competitive process for both quotations and bids, and incorrect utilisation of the preference points system. Van Zyl (2006) also asserts that there is a lack of appropriate bid committees; use of unqualified suppliers, passing over of bids for incorrect reasons; utilisation of the incorrect procurement process in respect of the thresholds; extensions of validity periods; and incorrect utilisation of the limited bidding process. Furthermore, Ambe and Badenhorst-Weiss (2011b) noted that there are inadequate controls and procedures for the handling of bids; appointment of bid committee members not aligned to policy requirements; and insufficient motivation for deviations from SCM procedures.

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Inadequate planning and linking demand to the budget

Demand management is integral to the SCM process. It defines the decision-making process that allows departments to procure at the right time, at the right place and at the right cost. However, many government entities are still faced with the challenges of improper planning and linking demand to budget (Ambe & Badenhorst-Weiss, 2011a). Cost-effective procurement depends on a specialist’s skills to ensure that buying requirements are reliably determined, appropriate contract strategies are developed, contracts are well managed and opportunities are seized to secure the best deals at the right time and at the right price. The importance of drawing up accurate and realistic strategic plans cannot be overestimated. At times there is an absence of coherent plans. Some government entities cannot properly quantify the needs of those requiring their services or properly estimate costs, nor can they accurately track, control or report on expenditure (Luyt, 2008). Luyt (2008) indicates that there is a need to monitor the delivery of services properly to ensure that scarce resources are efficiently and effectively procured. Poor planning and budgeting have also affected the implementation of SCM. It is therefore vital that SCM practitioners adequately link demand planning to budget.

Accountability, fraud and corruption

Accountability constitutes a central pillar to public procurement (Soudry, 2007). Without transparent and accountable systems, the vast resources channelled through public procurement systems run the danger of being entangled with increased corruption and misuse of funds (Jeppesen, 2010). According to Mahlaba (2004), fraud and corruption cost South African tax payers hundreds of millions of rand each year. Over the last few years, the impact of fraud has led to the promulgation of special legislation and improvement in existing legislation that led to the creation, among others, of the Directorate of Special Operations, commonly known as the Scorpions, the Asset Forfeiture Unit, the Public Protector, the Special Investigation Unit, Commercial Crime Units, Internal Audit Units, Special Investigation Units within departments, and the appointment of forensic consultants (Mahlaba, 2004).

According to Boateng (2008), since 1994, South Africa has enjoyed unprecedented social and infrastructural programmes. Yet, the majority of people who had hoped freedom would bring with it relative socio-economic liberation and improvement are feeling increasingly bitter towards government over issues that include a lack of perceived quality of governance, service delivery failure, fraud and corruption in some spheres of the economy and disillusionment with empowerment policies (De Lange, 2011). The Public Service Commission Committee (2011) indicated that a total of 7 766 corruption cases had been reported through the National Anti-Corruption Hotline since its inception in September 2004 up till June 2010. De Lange (2011) notes that taxpayers were fleeced of R30 billion (3.675 billion USD). Corruption, incompetence and negligence by public servants were

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to be blamed (De Lange, 2011). About 20 per cent of government’s procurement budget alone ‘went down the drain each year. This was because officials had their fingers in the till, overpaid for products and services or failed to monitor how money was spent’ (De Lange, 2011). Among government entities probed for procurement irregularities was the Tshwane Metro where about 65 municipal officials were investigated for striking business deals worth about R185 million with their own Council (Pauw, 2011). The National and Provincial governments and their entities notched up R21 billion in irregular expenditure in 2010, a 62% rise (R13 billion) over the previous year (De Lange, 2011). The auditor general highlighted weaknesses in SCM, controls over information technology, human resource management, and capital assets and performance reporting during a briefing to Parliament’s Standing Committee on Public Account (Smart Procurement, 2011).

Hence, there is an urgent need to rethink innovative ways of curbing corruption and some other administrative malpractices within South African spheres of government. To fight the scourge of maladministration, mismanagement of finances, fraud and corruption, government needs to strengthen and review existing internal control systems to detect deficiencies.

Inadequate measures for monitoring and evaluation of SCMEffective policy-making requires information on whether governments are doing things right and whether they achieve the results intended (Acevedo, Rivera, Lima & Hwang, 2010). Strong monitoring and evaluation systems provide the means to compile and integrate this valuable information into the policy cycle, thus providing the basis for sound governance and accountable public policies (Acevedo et al., 2010). Inadequate monitoring and evaluation is linked to the absence or the poor presence of a control environment, and the government entities are placed in a difficult position to give effect to or implement SCM as required by the policy. Hence, deviations or non-compliance goes undetected or is identified after the fact. According to a Business Day report (2011), procurement actors in government have spent millions of rand in ways that contravened laws and regulations. The national and provincial governments and their entities have notched irregular, unauthorised, fruitless and wasteful expenditures that contravene laws and regulations. There is lack of proper monitoring and evaluation as required (Stemele, 2009).

Unethical behaviour Ethics is the study of moral judgements and right and wrong conduct. Ethics and conflict of interest greatly affect SCM implementation. Enormous power is wielded by some chief financial officers but there is also a lack of proper consultation with other senior officials. While the National Treasury’s guide to accounting officers prescribes a standard approach towards SCM procedure, in many instances there is lack of compliance and application of the guidelines. This has resulted in differentiation in approaches and a lack of standardisation. According to McCarthy (2006), the completeness of tender documents in many municipalities is difficult to verify.

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Too much decentralisation of the procurement system

In South Africa, government procurement of own or local requirements (materials, equipment and services) is to a large extent decentralised to departments, provinces and municipalities. If one takes the number of cases of tender fraud and lack of services on all levels of government into account one should ask oneself whether these parties have the knowledge and/or the intention to get the best value for tax-payers’ money. Arguments for a larger extent of centralisation of procurement to knowledgeable, accountable procurement officials/agents or procurement consortiums could be put forward.

‘Centralization leverages scales to reduce costs. Decentralisation relies on local knowledge to build relationships’ (Fawcett, Ellram & Ogden, 2007: 310). Centralisation offers advantages such as leverage due to volumes, reduction of duplication of purchasing effort, better control and development of specialised expertise of purchasing personnel (Handfield, Monczka, Guinipero & Patterson, 2011: 160–61). On the other hand, decentralisation often leads to better responsiveness to purchasing needs, a better understanding of unique local needs, and is closer to suppliers and taking ownership of decisions that impact on one’s own budget (Handfield et al. 2011: 162). However, if the advantages of centralisation are to be realised, efficient contract management and supplier relationship management is a pre-condition. The schoolbook saga in various provinces of South Africa in 2012, where textbooks had not been delivered to schools by the third term of the school year is an example of what can happen without proper contract management.

Ineffectiveness of broad-based black economic empowerment

The South African government adopted the provision of BEE to empower all historically disadvantaged people rather than only a small group of black investors. To this end, it adopted the Broad-Based Black Economic Empowerment Act (BBBEEA), which calls for expanded opportunities for workers and smaller enterprises as well as more representative ownership and management. Current BEE provisions have, however, in many instances failed to ensure a broad-based approach, instead imposing significant costs on the economy without supporting employment creation or growth. The present BEE model remains excessively focused on transactions that involve existing assets and which benefit a relatively small number of individuals. The following shortcomings have emerged in the implementation of BEE: First, ownership and senior management issues receive disproportionate emphasis. The unintended consequences of this trend include ‘fronting’, speculation and tender abuse. Secondly, the regulations do not adequately incentivise employment creation, support for small enterprises and local procurement. The preferential procurement regulations aggravate this situation by privileging ownership over local production. Finally, the BBBEE regulations penalise public entities as suppliers. The democratic state owns public entities on behalf of its people yet the regulations do not count them as ‘black empowered’ (Zuma, 2009).

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Subsequent to the discussion presented above, it is evident that there are constraints in procurement practices in the South African public sector. These predicaments can to a large extent be attributed to lack of proper knowledge, skills and capacity. Therefore, the South African government will need to address these dilemmas in order to fully achieve the policy objective of public procurement.

THE WAY FORWARD FOR PUBLIC PROCUREMENT IN SOUTH AFRICA

There are a number of issues that could be considered to enhance procurement in the South African public sector. Therefore, it is critical that policy- and decision-makers consider developing skills and knowledge through specialised training programmes, involve stakeholders in the bidding process and employ centralisation and decentralisation for different categories of goods and services as discussed below.

Developing skills and knowledge through teaching a two-model curriculum

Institutions of higher learning and other service providers have a critical role to equip learners and practitioners with appropriate skills and knowledge. The capacity for qualified practitioners would only be available when educational institutions contribute to the challenge by way of developing a curriculum that meets the needs of the country. Such programmes should provide for an understanding of the knowledge of the South African public sector and its regulations.

Figure 1 illustrates an example of a two-model curriculum where learners have a choice to focus on the private or public sector. In this model, the skills required are general procurement skills and industry-specific skills. The private sector-oriented, programme-specific skills require an understanding of the general business environment (enterprise management), while the public sector-oriented programme concentrates on the legislative environment (to sensitise learners to an integrated approach in the management of procurement within the highly regulated public sector environment). Both programmes require general procurement skills which should include, among others, the knowledge of and insight into the purchasing and supply environment, sourcing strategies, purchasing and supply tasks, integrated supply management, globalisation, and technological advancement. Figure 1 illustrates a framework for a two-model curriculum for procurement in South Africa.

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Private sector-orientedObjective: Profit maximisation

Public sector-orientedObjective: Quality service delivery

Skill

s ne

eded

Enterprise management Sector-specific skills - Public financial management

- Public procurement and supply chain management

Skills needed

Knowledge on the business environment

Knowledge on the SA public procurement environment

- Purchasing and supply management

- Purchasing and supply tools- Legal aspects in purchasing- Storage and inventory

management

General procurement management

- Purchasing and supply management

- Purchasing and supply tools- Legal aspects in purchasing- Storage and inventory

management

Figure 1: Two-model teaching curriculums

Stakeholders’ involvement

Public procurement malpractices could be limited through the employment of stakeholders such as civil society organisations to be part of the procurement process. The current status of the procurement system requires the creation of three bid committees, namely the bid specification committee, the evaluation committee and the adjudication committee. For the purpose of compliance and to minimise unethical and corrupt practices, stakeholders should be involved in the evaluation and adjudication process. This will ensure and support open governance. Open governance creates the conditions for effective collaboration between governments and citizens in a process that enhances legitimacy and accountability of public decision-making.

Stakeholder involvement will also encourage public servants to be more deliberate about decisions they make and will provide citizens as well as stakeholders with the opportunity to hold their leaders accountable. It will improve the efficiency of government institutions, reduce fraud and waste of public finances, strengthen the management of natural resources and ensure better service delivery.

Strategic sourcing (centralisation versus decentralisation)

Another improvement strategy for public procurement is the use of centralised and decentralised procurement strategies for different categories of goods and services. There are many arguments for centralisation, specifically better control and expertise. However, the answer for poor public procurement practices should rather be sought in strategic sourcing. An analysis of public procurement requirements at all levels of government should be done and high risk–low cost items (known as bottleneck items) and high risk–high cost items (strategic items) should be purchased on a centralised basis with longer-term contracts and high levels of contract and supplier management. Leverage items that are

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low risk but high cost can be purchased through one agency, for example a procurement consortium. The different public institutions then order from the contractor/supplier against a contract, typically through e-procurement, and distribution takes place on a decentralised basis. Here, contract management, and particularly feedback on supplier performance, is essential for this type of purchasing to be efficient. Non-critical, low risk–low cost items (also known as routine items) can be purchased on a decentralised basis by means of quotations from local suppliers (Simchi-Levy, Kaminksi & Simchi-Levy, 2009: 287).

Over and above the proposed recommendation, it is important that departments, municipalities and municipal entities engage with the employment of qualified procurement practitioners, training and employment of internship programmes, development of an effective monitoring and evaluation tool, creation of incentive programmes to motivate good performance, tools (information communication technology) and also good leadership (Ambe & Badenhorst-Weiss, 2011b).

CONCLUSION

Within the framework of a conceptual analytical approach, an examination of relevant literature and public procurement practices, challenges faced by the South African public sector is discussed in this article. Public procurement is increasingly recognised as a key concept that plays a significant role in the successful management of public resources. For this reason, several countries have become more aware of the importance of procurement as an area vulnerable to mismanagement and corruption, and have thus instituted efforts to integrate procurement in a strategic position of government efforts. As part of the need to adopt a long-term and strategic view of their procurement and management, most countries have resorted to turning to their annual procurement plans as a possible ‘problem-solver’ (Mahmood, 2010).

Public procurement primarily aims to be fair, equitable, transparent and cost-effective. Because of its importance, it can also be used at a secondary level as a problem solver. Due to the huge problems faced in South Africa, especially because of the country’s inequality in the past, public procurement is of particular significance and has been granted constitutional status (Bolton, 2006). In this regard, there are categories of preference in the allocation of contracts as well as the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination.

In South Africa, SCM is an integral part of the procurement process. It is a policy tool used in the management of the procurement process. Despite the importance of procurement as a policy tool, and the effort by government through the introduction of programmes such as SCM, procurement remains challenging in South Africa. These challenges include

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among others lack of proper knowledge, skills and capacity; non-compliance to the national treasury policies and regulations; inadequate planning and linking of demand to the budget; lack of proper accountability; fraud and corruption; inadequate response to and inconsistency in risk management/irregularities in SCM; inadequate measures for monitoring and evaluation of SCM; unethical behaviour; too much decentralisation and ineffectiveness of the BBBEE policy.

Against this background, it is evident that public procurement practitioners in South Africa require specific knowledge about the procurement objective, SCM policy, preference procurement policies and so forth in order to manage the procurement process effectively. Specialised training programmes are therefore required to equip actors with the skills to achieve procurement objectives. Key issues such as employment of qualified procurement practitioners, training and employment of learnership programmes, development of an effective monitoring and evaluation tool, and the creation of incentive programmes to motivate good performance should be employed. In addition, institutions of higher learning and other service providers should equip learners and practitioners with appropriate skills and knowledge through the development of a syllabus that ensures sustainable procurement in South Africa. In addition, it is important to involve stakeholders in the bidding process and employ centralisation and decentralisation for different categories of goods and services.

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Table of acronyms

BBBEE Broad-Based Black Economic Empowerment

BBBEEA Broad-Based Black Economic Empowerment Act

BEE Black Economic Empowerment

CPAR Joint Country Assessment Review

GDP Gross Domestic Product

MFMA Municipal Financial Management Act No 56 of 2003

PFMA Public Finance Management Act No 1 of 1999

PPPFA Preferential Procurement Policy Framework Act

SCM Supply Chain Management

African Journal of Public Affairs106

Manifestation of Unethical Procurement Practices in the South African Public Sector

G Mazibuko and D J Fourie

School of Public Management and Administration

University of Pretoria

South Africa

ABSTRACT

A drawback for the administration of procurement practices in the South African

public sector is a negative side-effect which undermines the public’s confidence

in the procurement environment. Public procurement is the nexus between the

public and private sectors and also vulnerable to procurement fraud and cor-

ruption. In the public sector where goods and services are funded by public

expenditure, taxpayers have reasons to be concerned over public procurement as

tax paying community. The question thus arises as to whether the administration

of procurement practices is underpinned by value for money, ethics, competition,

transparency and accountability in the South African public sector. Explaining the

reasons for this, demands greater awareness of the public sector procurement

environment and its challenges in the South African environment and beyond.

This article therefore examines the manifestation of unethical procurement prac-

tices which traces non-compliance with legislation, uncompetitive bids, awards

to employees and family members, and accepting less than three quotations,

inadequate contract management and internal control, leadership, as well as

irregular expenditure.

INTRODUCTION

The World Bank (2012:7) states that at the heart of good governance lies effective public financial management, which is linked to multi-stakeholder engagement, politi-cal accountability, effective checks and balances. The Bank further links three pillars

Volume 9 number 9 • December 2017 107

of effective and successful governance to increasing value for money, improving public service delivery, and creating an enabling environment for private sector-led growth. Further, public procurement, with links to all three pillars, is thus an essential ele-ment of governance reforms. A good procurement system that features transparency, accountability, and stakeholder participation can be a practical tool for carrying out effective governance reforms. Public procurement is a complex function which depicts a series of practices on government actions interacting with public policy. Public procurement could be described as the supply chain system for the acquisi-tion of all necessary goods and services by the state and its organs when acting in public pursuit or interest. Public procurement constitutes a significant modus operandi in the public-sector arena and it thus stands as the procedural requisite for the delivery of public services.

The legislative requirements are a fundamental starting point for the application of procurement practices in the South African public sector. Parliament has established a legislative regime for the procurement procedures and decisions of organs of state to reflect the constitutional status of public procurement. The South African Constitution, in section 217(1), stipulates that organs of state must contract for goods and services in accordance with a system which is fair, equitable, transparent, competitive and cost-effective. The essence of public procurement legislation is to define and enforce those procedures that will produce a productive and efficient result while respecting the public nature of the process and the duty of fairness to the suppliers. The objectives of govern-ment procurement function differ considerably from the objectives of an establishment in the private sector as profit is not an issue in government (Taylor & Raga 2010:8).

Public procurement is fundamental to government service delivery as it often in-volves large sums of money (Chigudu 2014:21). Where problems are rampant, public procurement is one of the most serious and common areas for unethical procurement practices. The entire amount of money that flows through govern-ment procurement provides the temptation and opportunity for unethical procure-ment practices. Unethical public procurement practices prohibit the public sector from obtaining goods or services at the lowest possible tariff. When procuring errors undermine competition during planning or budgeting phases, it might be considered as procurement unethical procurement practices. In South Africa the constitutional importance is given to the objectives of value for money, integrity in public spending practices, accountability to the public, and efficiency as the primary drivers for procurement and unethical procurement practices should be controlled.

Government institutions preside over commodities that are of value to citizens. Gains realised from good public procurement practices make additional resources available


for development (USAID 2013:3). Coombs and Jenkins (2006:2) state that the proper public sector planning of public expenditure is clearly an important mechanism in the government’s overall control of the procurement planning. At national and provincial level, the Public Finance Management Act no. 1 of 1999 (PFMA) regu-lates financial management in the national and provincial government. Furthermore, regulations have been enacted that address superficially supply chain management and the conclusion of public-private partnerships (Quinot & Arrowsmith 2013:185). In South Africa, there are also express legislative provisions regulating the way in which specific powers must be exercised relating to offences of corrupt activities to contracts, and offences in respect of corrupt activities in terms of the procuring and withdrawal of tenders.

The article will use the qualitative method to analyse the manifestation of unethical procurement practices and documents generated by the Auditor General South Africa, South African National Treasury and the South African Public Service Commission and South African Special Investigation Unit. The purpose of the article is to explore the issue of the manifestation of unethical public procurement practices by contextu-alise procurement fraud practices, the examination of the manifestation of unethical procurement practices in the South African public sector and to reflect on the mecha-nisms to ensure good governance and prevent unethical procurement practices.

CONTEXTUALISATION OF PROCUREMENT FRAUD PRACTICES

Biegelman and Bartow (2006:2–5) posit that fraud has always been an issue on the side of honest citizens and the enactment of strong laws and the empowerment of enforcement agents are helpful but do not guarantee an end to fraud). A culture of non-compliance combined with a lack of accountability and transparency con-tributed to the wholesale of looting and unethical procurement practices. Manyaka and Sebola (2013:76) posit that unethical conduct by public officials has provoked a widespread global discourse on good governance. Rottig, Koufteros, and Umphress (2011:163–204) contribute to the importance of a multifaceted moral ethics/formal ethical infrastructure, consisting of formal communication, recurrent communica-tion, formal surveillance, and formal sanctions. Ethical concepts and principles that relate to the procurement process are loyalty and respect for rules and regulations, integrity, impartiality and fairness, transparency, confidentiality, avoidance of the appearance of impropriety and due diligence (UNDP, 2007: section, E, 4.0). Zitha and Mathebula (2015:21) state that unethical conduct of procurement officials goes along with corruption, bribery, fraud and nepotism which impacts negatively on


poor quality service delivered to the people. The manifestation of unethical procure-ment practices will therefore relate to uncompetitive bidding, inadequate contract management, and the awarding of bids to employees and their family members, non-disclosure by suppliers, no supporting documents for procurement awards, us-ing incorrect preferential point systems and thresholds, and acceptance of less than three quotations.

There are great risks that the procurement process faces during the pre-bidding phase, e.g. lack of adequate needs assessment by contracting authorities and thus leads to poor procurement planning and budgeting. During the bidding phase, the level of in-formation might not be uniform across all actors to attract enough bidders in public procurement through processes that are open and fair thus project a key concern. The post-bidding phase is also exposed to certain risks. e.g. great risk of failure to monitor performance of contractors, lack of supervision over the quality and timing of the pro-cess, substantial change in contract conditions to allow more time and higher prices for the bidder, product/service substitution or sub-standard work or service not meet-ing contract specifications and theft of new assets before delivery to end-user or be-fore being recorded in the asset register (Reinvest Institute for Development Research (RINVEST) & Center for International Private Enterprise (CIPE), 2012:17).

MANIFESTATION OF UNETHICAL PROCUREMENT PRACTICES

The procurement for infrastructure delivery and maintenance is paramount for economic development and growth in South Africa. Government has adopted the National Development Plan (2013) as the country’s framework for economic and so-cial transformation. However, economic and social development is not sufficient to eradicate corruption (Rose-Ackerman & Sǿreide, 2011:141). Public procurement has an important role in the public sector. Any public institution requires external resources in pursuit of its objectives, e.g. resources could be goods, services, works or consultancy. Procurement is important strategic business management function to manage entire process from assessment of need, identification of product, forecasting, sourcing, logistics, risks managements, value engineering, supplier relation management and regulatory compliance efficiently and effectively. However, the manifestation of un-ethical procurement practices impedes the achievement of the above imperatives as is discernible in the following key findings namely: uncompetitive or unfair procurement processes, inadequate contract management, awards to close family members of em-ployees, lack of documentation to the awards and awards to employees of government institutions. Figure 1 reflects common issues for the financial years 2013/14 to 2015/16.


Uncompetitive or unfair procurement processes

There were 222 cases of uncompetitive or unfair procurement processes in the fi-nancial years of 2013/14, 226 cases in 2014/15, and 247 cases in 2015/16 and thus reveals that uncompetitive or unfair procurement processes which could amount to the discrimination of suppliers in national departments which is against the regulatory framework and relevant legislation (AGSA 2014:18, 47, 86 & 157). Khumalo, Nqojela, and Njisane, (2011:2) propagate that tendering procedures are designed to promote competition and limit discrimination in procurement processes.

Inadequate contract management

Durant and Durant (2013:157) posit that contracting is an economic exchange amongst actors in which the government’s central management challenge is to align public values, institutions and service market conditions for effectiveness across the three-principal contracting or bidding stages or phases. The study found that there was inad-equate contract management in 2013/14 (63 cases), 2014/15 (79 cases) and 2015/16 (70 cases). Contracting of massive infrastructure development and huge works involve elaborate and unpredictable relationships between buyers and vendors which need to be accounted for and managed effectively (Pollitt & Talbot 2004:94–95). Lack of proper record keeping and management, specifically regarding tenders, and failure to

Figure 1: Unethical procurement practices 2013–2014 to 2015–2016

Source: Auditor General South Africa. (2014, 2015, 2015). Consolidated general report on the national, provincial and public entities audit outcomes 2013/14, 2014/15 and 2015/16.

2 500 000

Uncom-petitive or unfair pro-curement processes

Inadequate contract manage-

ment

Award made to

employees

Awards to close family members of employees

Supplier did not declare

interest

Employee did not declare interest

Internal control

inadequacy

Poor document manage-

ment

2 000 000

1 500 000

1 000 000

500 000

0

Ran

ds

Unethical practices

226 79151 000101 000

1 518

119 000

994 000

197 000

2 000 000

32 87624 672 0.00

2013–14' 2014–15' 2015–16'


appropriately safeguard documentation to support tender procedures affects contract management (AGSA 2014:18, 31, 60 & 68). The potential for manipulation of contract awards and lack of fair competition, all of which create the perception in the popu-lation at large, that public expenditure is slow, ineffective, and expensive and often corrupt (Ngugi & Mugo 2012:2314–2315).

Awards made to employees and family members

There is a link between corruption and conflict of interest in this study about employee awards and to their family members. PwC and Ecorys (2013:85) postulate that a “con-flict of interest” involves a conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities.” A conflict of interest can be current, or it may be found to have existed at some time in the past. In the end, there are only two varieties of cases relevant for this study: corrupt cases of procurement and non-corrupt cases of public procurement. A corrupt case of procurement is a case where, at some stage in the procurement process, any power has been abused for private gain. In a non-corrupt case of public procurement, no-where in the procurement process has any power been abused for private gain (PwC and Ecorys, 2013:58). Awards can be made due to bad governance, manifested by lack of transparency, weak accountability and lack of integrity by public officials entrusted with procurement by violating regulations and procedures with impunity (Mawenya 2008:3). Tutu, Kofi, Nyako, Ameyaw., & Ampofo 2014:3) asserts that corruption takes place when client officials entrusted with procurement collude with suppliers and con-tractors and break the law in pursuit of personal interests. Awards made to employees amounted to 36 cases in the financial years of 2013/14, worth R119 million, 27 cases in 2014/15, valued at R101 million and 29 cases in 2015/16 valued at R129 million. Awards to close family members of employees were identified as 39 cases for 2013/14, valued at R1,52 million, 47 cases in 2014/15, valued at R994 million and 51 cases in 2015/16, valued at R725 million.

Supplier did not declare interest

Cases where the supplier did not declare interest was as follows for the financial years 2014/15, 26 cases valued at R151 million, and 2015/16, 36 cases valued at R336 mil-lion. Cases where employees did not declare interest: 26 cases in 2014/15 valued at R197 million and 16 cases in 2015/16 valued at R59 million. The AGSA (2016:41) posit that failure by suppliers to declare the interest of employees and other state officials constitutes an unethical procurement fraud practices.


Inadequate procurement controls and irregular expenditure

The South African public sector faces extraordinary governance and procurement chal-lenges, with communities demanding transparency, accountability, and a greater say. To this end, the public sector also needs to improve the efficiency of managing public finances. The challenges can be viewed as opportunities for real change and fundamen-tal improvements, and public procurement reform lies at the heart of this opportunity (World Bank 2012:6). The non-compliance can be equated to governance challenges regarding supply chain management legislation which resulted in irregular expenditure. It is found that there were internal control inadequacy and irregular procurement pro-cesses during the financial years 2013/14 with 301 cases valued at R32, 876 million, 2014/15 with 287 cases valued at R24,672 million and 2015/16 with 308 cases valued at R31,596 million (Auditor General South Africa, 2014, 2015, 2016). Bor, Chepkwonmy, and Bonuke (2015:97) assert that non-compliance will include; non-compliance with the advertising procedures, application of unlawful contract award and selection criteria and insufficient or discriminatory definition of the subject-matter of the contract and negotiation during the award procedure. The internal control is a form of control and a managerial function of the management of the public institution (Dragos 2015:125).

Incorrect procurement processes in relation to threshold values for quotations and competitive bidding, extension of validity periods and incorrect use of the limited bid-ding process took place (National Treasury 2015:10). In addition, inadequate controls and procedures for handling bids, appointment of bid committee members not aligned with policy requirements and insufficient motivation for deviations from SCM proce-dures were also found.

Poor document management or no supporting documents

For the financial years 2013/14, 41 cases of poor document management or no sup-porting documents, valued at R2.1 billion were identified. In 2014/15, 32 cases were identified. In the financial years 2014/15 there were no recorded cases, followed by 30 cases in the financial years of 2015/16 valued at R2,526 million. Prevailing find-ings related to no or inadequate contract performance measures and monitoring and contracts amended or extended without proper approval (AGSA 2013:70). The non-submission of supporting documents varied over the three years as it depends on the value of the relevant contract awarded in the year. To this end, there was no evidence that auditees had followed a fair, transparent and competitive process for all awards (AGSA 2015–2016:42; AGSA 2013:70). It could be argued that documentation either did not exist or could not be retrieved as a result of poor document management. Raga (2008:117) is of the view that public sector procurement guidelines are issued


by government as a prescription of standards of behaviour, ethics and accountability which it requires for its public service (AGSA 2014:59; AGSA 2015:42 & 67). In addi-tion, poor record management created an environment in which it was easy to commit and conceal possible improper or illegal behaviour.

UNFAIR PROCUREMENT PROCESSES

Figure 2 reflects how unethical procurement practices unfolded. Unethical procure-ment practices included the following; three written quotations not invited; 146 cases (34%) for 2013/14, 128 cases (29%) for 2014/15, and 139 cases (30%) for 2015/16. Competitive bidding not invited; 79 cases (18%) for 2013/14, 146 cases (34%) for 2014/15, and 96 cases (21%) for 2015/16. Supplier tax affairs not in order, 74 cases (17%) for 2013/14, 66 cases (15%) for 2014/15 and in 2015/16, 63 cases (14%) were identified. Inadequate contract performance measures and monitoring amounted to 17 cases in 2013/14, 45 cases in 2014/15, and in 2015/16, 40 cases. Declarations of interest not submitted; 44 cases for 2013/14, 61 cases for 2014/15 and 53 cases for 2015/16. Preference point not applied for 2013/14 was 49 cases, 2014/15 had 51 cases and 2015/16 suffered 44 cases. Contracts amended or extended without approval were 30 cases for 2013–14, 20 cases for 2014/15 and 27 cases for 2015/16.

Figure 2: Case of unethical procurement practices: Financial years 2013–14 to 2015–16

Source: Auditor General South Africa. (2014, 2015, 2015). Consolidated general report on the national, provincial and public entities audit outcomes 2013/14, 2014/15 and 2015/16.

Three written

quotations

not invited

Competitive

bidding not

invited

Supplier tax

affairs not in

order

Inadequate

contract

performance

measures and

monitoring

Declarations

of interest not

submitted

Preference

points not

applied

Contracts

amended

or extended

without

approval

Perc

enta

ge

(%)

100908070

405060

3020100

Unethical practices

2013–14' 2014–15' 2015–16'

30

139

29

128

34

146

21

96

34

146

18

79

14

63

15

66

17

74

12

53

14

61

10

44

9

40

10

45

417

10

44

12

51

11

49

6

27

5

20

7

30


Ethical leadership

The Auditor General asserts that there was lack of day-to-day monitoring and involve-ment by the leadership in the administration of the department (AGSA 2012). The Institute of Directors in Southern Africa (IoDSA) (2016:30) posits that the King IV code recommends leadership to ensure compliance is understood, not as an obligation, but as a source of rights and protection. The Chartered Institute of Purchasing and Supply (CIPS) (2012) states that leadership should universally apply the practice set out as laws, regulations, policies and procedures (Ayoyi & Mukoswa 2015:1). However, it was revealed that, the above-average governance is not practised adequately in the South African public sector. Eyaa, and Oluka (2011:38) asserts that another cause of non-compliance is lack of professionalism. Many issues may be more important than ethics; however, famous paradox dictates that ethics are more important than any issue that will require ethical decision making (Valentine, 2014:139–140).

Value for money, competition, transparency and accountability

Office of Government and Commerce (OGC) (2008:16) states that the public sector spends billions a year on the goods and services needed to deliver public services. To achieve value for money for the taxpayer, effectively managed procurements-properly planned and executed–are essential. Given the limited resources available to gov-ernment, ensuring value for money in procurement is key to ensuring the optimum utilisation of scarce budgetary resources. OGC (2008:19) states that suppliers have been known to operate cartels and restrict competition or drive up prices, and some suppliers and staff have, on occasion, committed fraud. That may include; falsifying invoices; business awarded unfairly in return for bribes or suppliers inflating prices in collusion with staff and/or competitors. Competition is the cornerstone of public sector procurement.

The public availability of disclosed information in the public sector is also important to ensure accountability and reinforcing trust (OECD 2012:5). Official disclosures or veri-fication of an official’s financial standing, interest and past practices assist accounting officers in selecting committee members who are above reproach. Legislation allows for precautionary suspension of employees that serves as a safety measure used by affected departments to allow for unhindered investigation, pending the institution of disciplinary procedures (Fourie 2015:42). There is a need for the envisioned public procurement governance framework which will be underpinned by centre led action network, public procurement advisory unit/matrix approach and the total profession-alisation of procurement environment.


CONCLUSION

This article seeks to highlight the manifestations of unethical practices in the procure-ment environment. Unethical procurement practices are dangerous and ubiquitous, costly and can produce economic and social ills to society. It can impair trade, deter in-vestment, diverting government spending away from public good such as infrastructure development and public works programmes. The focus on the manifestation of unethical procurement practices in the public domain could contribute to the knowledge base towards the development of mechanisms to curb unethical conduct. This study project that leadership and professionals in the procurement environment must not tolerate un-ethical procurement practices in any form. In addition, a public institution should ensure that performance at all the procurement stages are monitored effectively and contract management enforced without any compromise. This article presented an analysis of component of unethical procurement practices; uncompetitive bids, employees’ bids awards, non-compliance with supply chain management legislation, inadequate contract management, ineffective control systems, uncompetitive bidding, acceptance of less than three quotations, using of incorrect preferential point system and thresholds and irregular expenditure. The public sector should guard against the stated unethical mani-festation of procurement practices by establishing good governance mechanism.

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Volume 10 number 3 • September 2018 61

Recovering Responsibility and Integrity in Public Service

A Focus on Fundamental Principles and Values of Governance

R W Cox III* University of Akron

Akron Ohio, USA

P F Haruna** Texas A&M International University

Laredo Texas, USA

ABSTRACT

Public administration and the public service are facing a crisis. Whether it is

casual claims of a “deep state” conspiracy in the United States or the seeming

tolerance of authoritarian governments by the electorates in South America,

Europe, Asia, and Africa the idea and ideal of professionalised bureaucracy as

fundamental to modern government is being challenged in a way not seen since

the emergence of professional governance at the end of the 19th century. The

purpose of this article is to bring the discourse back to a focus on fundamental

principles and values of governance.

The article adopted a qualitative observational analysis by comparing, contrast-

ing and critically analysing relevant data and knowledge pertaining to the values

of governance in the context of integrity and responsibility in the public service.

Specifically, it synthesises literature and examines two fundamental governance

values that continue to attract scholarly attention — integrity and responsibility.

As developed here these two value perspectives are linked in the idea and ideal of

theoretical insight and professional practice. The research approach also included

specific unobtrusive research techniques such as concept analysis, historical analy-

sis and documentary analysis to eliminate bias and promote conceptual and contex-

tual analysis (Auriacombe 2016).


INTRODUCTION

Simply put, public administration and the public service are facing a crisis. Whether it is casual claims of a ‘deep state’ conspiracy in the United States, or the seeming tolerance of authoritarian governments by the electorates in South America, Europe, Asia, and Africa, the idea and ideal of professional bureaucracy as fundamental to modern govern-ment is being challenged in a way not seen since the emergence of professional govern-ance at the end of the 19th century. As suggested in prior works (Cox and Ostertag 2014; Cox, Pyakuryal and Hill 2008; Cox and Pyakuryal 2013; Cox 2000a, 2000b, 2005), the core values of integrity, capability, and capacity of professional administration critical to representative democracy are being questioned. Even the viability of representative democracy as an appropriate model of governance is challenged (Pollitt and Bouckaert 2011). Sometimes such challenges take benign forms such as in debates over the cost of the social welfare state and other times they reflect in debates about the value of public service perspectives (Fry 1988; Pollitt and Bouckaert 2011; Hood and Dixon 2013); Cox and Ostertag 2014).

The purpose of this article is to bring the discourse back to a focus on fundamental principles and values of governance. More specifically, the essay looks at two govern-ance values – integrity and responsibility. As developed here, the two value perspec-tives are linked in the idea and ideal of theoretical insight and professional practice. The former value has been closely examined, though more often by European academics than those elsewhere. As such there is a richer and deeper literature available, including sub-elements related to trustworthiness and professionalism. The topic of responsibility, while closely tied to that of integrity, is less well-developed. Historically, it has been framed and advanced in the context of the theory of politics-administration dichotomy. Moreover, often this value perspective is lost in discourses about accountability—origi-nally a component of responsibility – which now seems to be the core perspective. Based on these principles and values the building blocks of a framework to undergird the public service will be sketched.

INTEGRITY

Integrity is an organisational construct (Cox 2016; Haruna and Cox 2017), an aspect of both organisational culture and interpersonal relations. As Menzel (2012:55) suggests, “… demonstrating personal integrity requires: (1) taking personal responsibility for errors one may commit, (2) recognizing and crediting others for their work and contributions to the organization’s mission, (3) guarding against any conflict of interest or its appearance,


and (4) being respectful of subordinates, colleagues, and the public”. Again, turning to Menzel’s (2012:78) explanation an effective integrity system is: “The guiding values and commitments make sense and are clearly communicated. Organizational leaders are personally committed, credible, and willing to act on the values they espouse. The espoused values are integrated into the normal channels of management decision mak-ing and are reflected in the organization’s critical activities. The organization’s systems and structures support and reinforce its values. Managers throughout the organization have the decision-making skills, knowledge, and competencies needed to make ethically sound decisions on a day-to-day basis”.

On their part, Six and Huberts (2008:69) suggest five perspectives on integrity, empha-sising the relational element. Thus they connect integrity to the concept of “trustworthi-ness” (Six and Huberts 2008:69). For them, “Integrity is a concept similar to trustworthi-ness rather than trust. Both integrity and trustworthiness refer to attributes of a specific actor – in trust terminology, the trustee – that make that actor have higher or lower in-tegrity or trustworthiness in the eyes of another actor – again in trust terminology, the trustor…In both cases, it is generally considered good to maximize the amount of each…The relationship between integrity and trust is such that the higher an actor’s integrity, the more he will be trusted by another actor. Both concepts differ in important ways…Trustworthiness is restricted to the specific relationships: is the other actor interested in maintaining a relationship with me? Is the other actor benevolent to me? Are their norms acceptable to me? …On the other hand, integrity, as shown above, is based on a ‘relevant set of moral values, norms and rules’, not what I, personally, may hold as values and norms, not my personal interests” (Six and Huberts 2008:70).

Integrity and trustworthiness are values and norms that form the basis for organisational behaviour. In 2000, a “Model Code of Conduct for Public Officials” was released by the Council of Europe. The Code has a three-fold purpose: “to define the ethical climate that should prevail in the public service, to spell out standards expected from public officials, and to inform the public of what conduct to expect from public officials when dealing with them” (DeVel and Csonka 2002:365). This definition is instructive in appreciating the importance of integrity not only as a bulwark against corruption, but as the foundation for “right” actions. Thus, integrity is first and foremost an organisational expectation for those both within and without the public service. The behaviour of the public servant is to be trustworthy and as the notion of trustworthiness implies, it is judged by the public.

Although the functional benefits of trust in public management are acknowledged, it has not been adequately nurtured and sustained (Behn 1995; Bozeman and Kingsley 1998). Politicians tend to harbour the feeling that bureaucrats are likely to undermine


their political goals and aspirations (Moynihan and Roberts 2010; Moe 2006; Garrett et al. 2006). In much the same way, bureaucrats are concerned about political pressure, victimisation, and job insecurity (Bozeman and Kingsley 1998). The outcome of this scenario is the cycle of micromanagement, bureaucratic apathy, dissatisfaction, and poor performance (Behn 1995; Kim 2012).

For organisational integrity to thrive it is not enough to have good people making good decisions that reflect norms and values; nor is it enough for there to be a “transforma-tional leader”. As Six and Huberts (2006) have suggested, while trust is critical, it is trustworthiness that is the social relationship that bonds persons. Ethics and integrity are social constructs that are manifested in the actions of people. It cannot be merely the product of individual choice or individual capacity to reason to an ethical choice (French 1983). Especially in the public service, the norms and values that support organisational integrity are social and cultural. But first and foremost, among these social and cultural values is the idea of professionalism which is explored next.

PROFESSIONALISM IN GOVERNANCE

Are there “heroes” in the public service? Are there those who have the maturity to under-stand the concept of passion at a distance (Weber 1946) – a passion for ideas and results? Without labelling it as such, this is the description of the public service as a profession. But what is meant by profession? According to sociology texts, professions have three defining characteristics: norms/values, perspectives, and practices. Professions evolve as a specific set of practices and shared norms that are first taught (often in what are characterised as “professional schools”) and then emerge as “proper” or accepted behaviour (practice). Shared credentials and ultimately a shared “language” separate those who are capable of “understanding” from those who cannot understand. A profession, then, is an explicit career that usually requires a college degree, often at the master’s level (Mosher 1982). Additional features of a profession are client recognition, professional identity, professional culture, a code of ethics, a formal measure of professional competence and sufficient dis-cretion to perform at a professional level (Fitzpatrick 1990:32).

For example, the profession of city management (and much of the public service as we know it today) is the quintessential 20th century profession. Not only was it born in that century, but also, the precepts and notions of governance and management that emerge around the turn of that century to this day heavily influence it. Furthermore, it can be argued that it is the first self-conscious profession in that it represents the first effort to shape job descriptions and performances to the notion of professionalism.


In a literature search, we have found no predecessor occupation to the public service manager. In creating the profession of public manager—most notably the city man-ager—the norms, perspectives, and precepts of the profession were defined and then the practices determined. It can be argued that city management was a profession before it was an occupation. To this day, the fundamental characteristics which distinguish the professional government manager are not those of occupation but those of credentials, recognition, experience, and social status. Local government managers are professionals because the norms, values, and perspectives that are necessary to distinguish a profes-sion are laid out – one of the critical distinguishing features being the development of and adherence to a code of ethics. The government manager changes practices to keep faith with values and norms of the profession. This historic continuity of purpose and values is both the greatest strength and weakness of the profession (Cox 2004; Cox, Buck and Morgan 2011).

Contemporary American public management emerged from two separate but related intellectual traditions of the late 19th century—urban reform movement and scientific management philosophy. This odd coupling of a political movement with an organisa-tional and structural perspective remains relevant to this day. The attributes included a commitment to transforming the structures of government coupled with the introduction of theories of management. The then new profession of city management, for example, required transformation of governmental structures to be able to “practice” the vision of the then emerging new urban society. The vision began with the separation of the political role from the administrative role so that government would be operated and managed as though it was apolitical.

What were and are the implications of this melding of government form (the embodi-ment of the dichotomy) and professional practice? The experience and evolution of city management is instructive, because it reflects the tension and conflict in the expectation of how things “should” be. Three are particularly relevant:

●● For decades the profession meant “City” management linked to a form of non-partisan government (council-manager),

●● Representative democracy was based upon a reliance on professional managers and educated technical personnel, and

●● Norms of behaviour grounded in a code of ethics are critical (Cox 2004).

Helping an organisation to follow an unknown path of change and innovation is not an easy task. It takes a manager of insight and courage to do so. The attractiveness and resulting persistence of old notions of control and direction as key attributes of


management practice is because it is a safe course, especially if the final goals are so far into the future that those who set the goals will not be around to be judged by the outcome, a more controlling style seems to be a wise course.

ADMINISTRATIVE RESPONSIBILITY

A normative foundation for public administration is necessary to fit together the disparate political and administrative pieces of public policymaking. These linkages can be estab-lished through an examination of the concept of administrative responsibility. There is no simple answer to this task, and any conclusions we may draw might well be as much a matter of perspective as of fact.

The issue of responsibility of public officials, while closely connected to ethics, is not the same. Administrative ethics is concerned with the behaviour of officials in the performance of their regular duties, while administrative responsibility concerns their relationship with their government and its underlying political philosophy. The ques-tion of administrative responsibility is bound to the question of the conflict between the role of the political official and that of the bureaucrat. To get past this problem, it is necessary to focus attention on the legitimate role of the bureaucracy as part of public decision-making. Legitimacy is interconnected with administrative responsibility. While administrators may be responsible without necessarily being legitimate, they cannot be legitimate if they behave irresponsibly, especially given the tenuous acceptance often accorded bureaucrats.

If public administration as it currently exists is not legitimate, then calls for reform must be taken very seriously. Rohr (1986:81) writes: “It is degrading for administrators to govern and for citizens to be governed by institutions that are deemed illegitimate … If the admin-istrative state is both inevitable and illegitimate, our dignity as citizens of a constitutional republic is in jeopardy”. Nearly 50 years ago Spiro (1969:4) wrote that “[c]onstitutional democracy is based upon the political responsibility of individual citizens”. This is the first imperative for a responsible bureaucracy. As citizens, bureaucrats must behave responsibly; as bureaucrats, they bear additional responsibilities. Government employment is not an excuse to avoid responsible behaviour. Spiro (1969:4) distinguishes three commonly used connotations for responsibility: accountability, causality, and obligation. “Accountability means being required to answer to external institutions for one’s prior behavior. The second form, causality, requires a direct correlation between one’s actions and the observed out-come of those… ’I ran the red light and am responsible for the accident’” (Spiro 1969:4). Obligation, the third connotation for responsibility, combines accountability and causality.


It requires a balance of the two. No one should be accountable for a situation over which they have no control; conversely, no one should have significant control without account-ability. Obligation implies a positive duty to act – to exercise causality balanced by being held accountable for errors of judgement, misuse of resources, or support of illicit out-comes. To that extent, responsibility in this sense is a value judgement.

No one argues about whether or not bureaucrats should be responsible or not. Instead, the question is how to ensure responsibility and accountability. Friedrich (1940) and Finer (1941), exemplify two approaches often adopted. Finer favours external constraints, i.e., for him, responsibility is an “arrangement of correction and punishment even up to dismissal of both politicians and officials” (Finer 1941:248). He is concerned with poten-tial bureaucratic sins of both omission and commission as well as with the tendency to do too much. This external check protects the citizen not only from deliberate impro-priety but also from the well-meaning but overzealous official. Finer (1941:248) quotes Montesquieu: “virtue itself hath need of limits”. Friedrich rejects external constraints and instead advocates internal checks such as proper recruitment, training, and professional socialisation. Finer would minimise administrative discretion while Friedrich argues that such discretion is inevitable and must therefore be structured.

Whether we agree with Finer or Friedrich, the bureaucrat is often left to make policy de-cisions. These decisions may be required at the very initial stages of the policy process. Occasionally, the delegation of legislative authority is so complete that an entire policy originates at the bureaucratic level. At other times, a civil servant may be so constrained by bureaucratic rules, legislative directions, and judicial oversight that he has virtually no autonomy at all. His problem, as Spiro (1969:4) pointed out, is that he is still inevitably held responsible. Even in a poor “situation of responsibility” (the balance between ac-countability and causality), the bureaucrat is still held responsible.

Responsibility versus accountability

One of the shifts that occurred over time has been the increasing emphasis on account-ability, usurping the centrality of responsibility. There are several reasons for this, not the least of which is the link between the dichotomy and responsibility. As the dichotomy became the centrepiece of the anti-corruption rhetoric of the progressives and the com-panion academics, the idea of the need for responsibility faded. Crick (1959:82) identi-fies this as the first step in diminishing administrative responsibility: “Perhaps the tragedy of the Progressive Era was that the doctrine of intelligent public administration based on technical standards began more and more to supersede the doctrine of personal respon-sibility” (Crick 1959:82).


Weber (1946:409) also addressed this issue in his classic essay, “Politics as a Vocation”. In reviewing “Politics as Vocation,” it should not be too surprising that the Weber writing in mid-career and the older, post-war Weber teaching in Munich might see the bureau-cracy in a new or at least different light. Many of Weber’s discourses begin with a de-tailed historical analysis with particular reference to the values and ideals which support and reflect that history, and then analyse the consequences for society now and in the future because of that history. History emerges as both a set of events and a set of ideas (Weber 1946:409). His concern is about the future, not the present. Weber (1946:409) would heartily concur with Hummel and Gale (2003) that “as context changes, their meaning changes”.

In March 1919 Weber was invited to present a lecture at the University of Munich. At that time Bavaria (and, therefore, Munich) was under the control of the “Soviet Republic of Bavaria” (Diggins 1996:250). The lecture covers such diverse topics as the sources and character of political power, pacifism, and the likely consequences of the peace process (the Versailles Treaty had not yet been completed). Weber (1946:77) himself suggests that the lecture would “raise certain questions concerning the significance of political action in the whole way of life”. The message to the audience was that the path out of political turmoil and chaos was in following those with the vocation for politics.

Why vocation? This is a discussion about a profound commitment to an idea or ideal. It is based on an inner drive that transcends experience and education. This is the context within which Weber wishes us to understand politics. This choice of terminology is critical to the perspective Weber offers. Weber’s notion of ethics required a “transcendent” per-spective. Also, this is a study in practical ethics. It is about the realities of decision-making in the state. To Weber, (1946:115) ethical decision-making requires courage, firmness of principles, and concern for consequences of actions/choices, or as he states, passion: “This means passion in the sense of matter-of-factness, of passionate devotion to a ‘cause,’ to the god or demon who is its overlord…. And for this, a sense of proportion is needed…This is the decisive psychological quality of the politician: his ability to let realities work upon him with inner concentration and calmness…Hence his distance to things and men… ‘Lack of distance’ per se is one of the deadly sins of every politician” (Weber 1946:115).

This is the basis of the distinction that Weber (1946) draws in defining his ethic. For many in politics, the concern is for what he refers to as the “material rewards” of politics – a position in government. Much of what passes for politics is little more than the pursuit of material reward. The pursuit of such reward is not a question of ethics. Rather, it is precisely the lack of an ethical referent that is the issue. In contrast to those for whom politics is about material benefit, the “genuine official” must be willing to stand up to his


superiors for his principles (Weber 1946:83–87 and 99–103). Importantly, standing up for principles means taking responsibility for the actions that result from decisions.

What is unique about political ethics is that it must be approached differently to that of religion, or even of administration. It is here that Weber introduces two ethical perspec-tives: the ethic of responsibility and the ethic of ultimate (or absolute) ends. Those for whom politics is a vocation must confront the realities of the power that they share. “The knowledge of influencing men, of participating in power over them, and above all, the feeling of holding in one’s hands a nerve fiber of historically important events can elevate the professional politician above everyday routine even when he is placed in formally modest positions” (Weber 1946:115).

The connections are more apparent when this “ethic” is contrasted with the ethic of absolute ends. Weber rejects this ethic as an appropriate ethical perspective for politics. The difficulties are two-fold, first in the resistance to the mediating influence of the social consequences of our actions and second in that the “believer in an ethic of ultimate ends feels ‘responsible’ only for seeing to it that the flame of pure intentions is not squelched” (Weber 1946:121). The “believer” is irresponsible in the sense that the practicality, or even possibility, of reaching the goal is never considered.

How then to summarise the ethic of a person with the vocation for politics–the ethic of responsibility? The key to this perspective is its emphasis on the consequences of actions, not merely its purpose. This is, as Weber describes it, the ethic of the mature man. The ethic, which Weber advocates, is an ethic that is fully conscious of the consequences of actions yet remains grounded (soberly and intentionally) in principle. Perspective is both at the heart and head of this matter.

In addressing the values or “ethic” of the politician Weber argues the need to consider and even anticipate those unintended and unforeseen consequences as the basis for public policy. In fact, the ideal typical methodology was developed as a heuristic device to analyse and anticipate, the “unintended and unforeseen” (Weber 1946:121). The goal is seemingly quite pedestrian – that which is possible – yet it requires heroes, i.e., those with passion and perspective, to be achieved.

Presciently, a century earlier, Kant (1983) noted that the basis for peace is not in agreeing to end war, but in constructing a mechanism for ensuring peace. There is no means to prevent the lawless from engaging in a renewed war, especially if the terms of peace are seen as unjust. In this regard Kant shows himself to be something of a realist about human nature, even as he constructs a theoretical doctrine of law and duty that transcends that nature.


He offers this transcendental formula of public right: ‘… All actions that affect the rights of other men are wrong if their maxim is not consistent with publicity’ (Kant 1983:135).

Both Kant and Weber would agree that the central point about ethics is how it affects society. Both judged behaviour from the standpoint of society (politics) rather than from some inward-looking perspective. Certainly, Weber was unsure that remarkable or he-roic bureaucrats would emerge. But he did hope that a few passionate politicians would populate the government to move it forward.

Into this discourse, O’Leary (2006) offers a different view of the conflict. From this per-spective, it is potentially the “guerrilla” public administrator who champions the “right” choices in the face of political opposition. She examines the actions of career public servants who work against the wishes, either implicitly or explicitly communicated, of their superiors. Critical for her thesis, is the fact that this conflict is between the dictates of the professional judgement of the bureaucrat and the political choices of superiors. At its most benign it is the failure of managers to successfully introduce dispute resolu-tion processes. Whether it is manifest in the increasing policy role of administrators, or the response to political interference by junior and senior administrators alike, there are unresolved ethics conflicts associated with the much dismissed, but nevertheless omni-present, politics-administration dichotomy (Rosenbloom 2008).

The central thesis of O’Leary’s book is that the majority of guerrilla government cases are the manifestation of inevitable tensions between bureaucracy and democracy that may never go away. These tensions yield immense ethical and management challenges, as well as several harsh realities. Although all guerrilla government activities are not created equal, some guerrillas are canaries in the coal mine telling us that something is wrong. And while all guerrilla government is not heroic, some guerrillas just may become creative assets to public organisations if their dissent is listened to and channeled appropriately (O’Leary 2006:3). For O’Leary, the government guerrilla is faced with the impossible dilemma of reconciling the professional judgement of what represents the best policy for an agency with the policy options chosen by senior, political, managers. There is a strong sense of self-righteousness in the decision to fight (even to the point of sabotage) the policy im-plementation. This choice is not the product of a singular perspective. O’Leary (2006:3) depicts the guerrilla acts from a range of motivations. Figure 1 depicts the multiple inter-secting perspectives that lead to the choice to become a guerrilla.

O’Leary (2006) correctly notes that these are behaviours that come at great risk. While the guerrillas “bring the credibility of the formal, bureaucratic, political system with them, as well as the credibility of their individual professions… [they] run the risk of being


unregulated themselves”. She expresses concern for the need that boundaries on the scope and nature of actions would be set (O’Leary 2006:115). In Rohr’s (1978) regime values serve as those boundaries. The limits of the guerrilla movement are when the process is implemented in service to the interests of individuals rather than in support of the professional judgement of those in agencies.

POLITICS AND ADMINISTRATION

Trust in government and in government employees is not high. Surveys on the morality of various professions routinely rank political officeholders below lawyers and barely above car salespeople, hardly an inspiring position. These negative responses came long

Figure 1: Intersecting perspectives of guerrilla acts

Source: (O’Leary 2006:9)

Bureaucratic Politics

Policy entrepreneurs The politics of expertiseStreet-level bureaucrats

Exit, voice, loyalty, neglect

Ethics

Personal ethicsOrganizational ethics

Professional ethics

Organizations and Management

Open systemsDemocratic organizationsNetworked governance

Organization culture


before the crises of the acceptance (or rejection) of immigrants from different cultures and religions coming into Europe; much less the overt racism and fear-mongering of the ill-prepared Trump administration in the US have made the shock and disappointment from prior scandals almost seem naïve. The shock engendered by Eisenhower’s lie about the U-2, the numerous deceptions of the Vietnam war, the controversy over the war in Iraq (in the US and the UK), and the scandals of the fiscal crises of 2008 and 2009, Brexit and the snipping at the bureaucratic rules and regulations from the EU, all have eroded the public’s trust in government. We are societies of cynics.

Practitioners have tried to ignore the moral aspects of their jobs by invoking the ethic of neutrality, which holds that administrators “are to give effect to whatever principles are reflected in the orders and policies they are charged with implementing” (Thompson 1985:556). Classical understandings of bureaucratic structure and organisation theory have provided little in the way of an ethical basis for administrative activity. Weber’s bureaucratic model was one source of the “ethic of neutrality”. Widely misunderstood as advocating model behaviour, Weberian bureaucracy became the archetype of an alienating organisa-tion. Individual morality had no role to play in the popular conception of a bureaucracy. The morality of policy decisions was a problem for the politicians, not the administrators. Despite numerous pleas in the literature of public administration to abandon the dichotomy between politics and administration, administrators still find shelter beneath the umbrella of neutrality. This approach has been reinforced by the organisation theory developed in the last century, starting with Taylor’s Scientific Management (1911), but strongly affirmed in the global fascination with the New Public Management (Cox and Ostertag 2014; Cox 2017).

Public policy analysis also tried to separate itself from the ethical dimensions of policy. Policy analysts, trying to gain acceptance for their work by paralleling the scientific and statistical methodologies of the natural sciences, for the most part consciously divorce their work from moral considerations. Since, even in the social sciences, nature abhors a vacuum, applied or situational ethics, which lacks a theoretical basis and relies in-stead on codified rules and narrow legal analysis, seeped in to replace more rigorous considerations.

Moral arguments are no longer the primary basis for public policy debates. For example, our increased national sensitivity to the rights of minorities does not rely on the moral imperatives that should underlie such debates. Instead, groups seeking redress for their civil wrongs cite the constitutional protections of procedural due process for the remedy. Segregation in public schools was banned not because it was immoral but because it had adverse psychological impacts on black children. In part, the American political sys-tem is not designed to take the high ground on such issues, interest groups have learned


to use the system to advance their causes rather than relying on moral suasion. However, the lack of moral debate means in part that as a nation, we have not resolved the under-lying causes of much of our civil unrest.

A few, most notably Hummel (2007), have noted that most such examinations have yielded the debate to the advocates of efficiency by shaping the debate as a zero-sum contest between democratic inefficiency and bureaucratic efficiency. This same logic led Wilson to advocate a more “businesslike administration”. But we no longer address the fundamental political theories that underlie a moral debate. How can we make sense of the stew of moral relativism that feeds our national culture?

ON COLLABORATION

Essentially public administration has travelled two distinct paths for nearly four decades. The divide is also played out in the fundamental conflict between an emphasis on ef-ficiency and an emphasis on effectiveness. The first path, informed by policy analysis and economics, focuses on the logic of managerial decision-making with an emphasis on tech-nical analytics and rational decision models. There is also a bias for business (private sec-tor) management approaches because of the emphasis on efficiency. The basic premise of this style of leadership is that leaders give orders (commands) to homogeneous followers. Leadership can be characterised as the exercise of power (Cox, Plagens and Sylla 2010).

Cooperative leadership

From the beginning there were those who doubted and challenged this approach. Exemplars of these critiques of the accepted views on leadership were Follett (1937; 1996) and Barnard (1968). The vision of the leaders expressed here is that of a conciliator and facilitator. A half century later these writers would provide the basic frame of refer-ence for advocates of a more “follower-centric” approach to leadership.

Follett’s view on the giving of orders presages future works of much later scholarship. It is in her work on orders that the emphasis on individualism and the dignity of the work come through most clearly. Follett firmly believed that orders, like control, involved a reciprocal, integrative activity. Compliance with orders was not simply the product of the authority of the issuer of the orders (Follett 1989). Barnard’s The Functions of the Executive (1968) has influenced generations of organisation theorists. His emphasis on cooperation, leadership, and the informal group represents a major departure from the structural and authoritarian assumptions characteristic of classical organisation theory. The second path, informed by


socio-psychological understandings and organisational dynamics, focuses on inter-personal and inter-organisational relations as the frame or lens for decision-making (Cox 2017).

Collaboration and networks

In 2001 Agranoff and McGuire (2001:20) suggested that there were seven “meta-questions” to be addressed concerning networks. That list included collaboration, cohe-sion and accountability. In a longer treatment on this idea in 2003 they described the American government as being in an “Age of Collaboration”. Attributes of governmental collaboration include:

●● Trust●● Mutual benefit●● Shared goal/outcome●● Pooled resources●● Or as they cleverly noted …. Familiarity breeds cooperation (Agranoff and

McGuire 2001:20).

THROUGH THE GLASS DARKLY

Public policies affect large numbers of people through governmental actions. Dunn (1981:ix) defines policy analysis as, “an applied social science discipline which uses multiple methods of inquiry and argument to produce and transform policy-relevant information that may be utilized in political settings to resolve policy problems”.

Policy analysis is a prospective activity rather than a retrospective one. It is a tool to help define alternatives and choose among them. Evaluation, in contrast, checks how success-ful a policy has been. It is a narrower endeavour in one sense, because usually evaluation is conducted at some endpoint in the policy process. Usually evaluators look at the stated goals and attempt to measure how well the policy meets the goals. The academic theories and models that define programme evaluation are not the same as those that define policy analysis. The level of analysis is different: Typically, evaluation is programme evaluation, and the distinction between policy and programme is analogous to that between goal and objective. Both policy and goal are broad, while programme and objective are narrow, more easily bounded and measured, and usually have less total impact.

The proper role of policy analysis is the clarification and surfacing of problems. In one sense, policy analysis has been a boon to the extremists of all political persuasions


precisely because of its quantification. Many people are in awe of numbers and do not understand the incorrect uses – both conscious and unconscious – to which they may be put. Sometimes the manipulation is from the policymakers. Several years ago, one southern state legislature hired a consultant to develop a computer model of the state’s water resources. The legislators then used the model to justify water resource decisions based on strictly political grounds. They worked the model from outcome to input, and when challenged by citizen interest groups, would show the mathematical “proof” of the correctness of their decision.

Some writers naively suggest that policy analysis is inherently democratic and that au-thorisation regimes are inhibited by social science (Lerner 1959). The opposite would seem to be true (Fischer 2009). Carefully wielded, social science is a powerful tool for control of even literate, middle-class populations. Even democratic regimes may be se-duced by the call of science. There is no such beast as neutral analysis. The best any analyst can hope for is to make their biases as explicit as possible so the policymakers, who must rely on this analysis, can evaluate the results fairly. This explication of bias can be very difficult; often we are not even aware of our own prejudices. An analyst who is risk-averse will choose very conservative statistical techniques to minimise the probability of error; an optimistic analyst may overestimate the good will of a politi-cal adversary. It is also tempting to draw the same absolutist conclusions about policy analysis results that natural scientists claim to be able to draw about their controlled laboratory experiments. With the natural conservatism of policy analysis, which must take the status quo – institutions, wage structures and so on – as given, it is not surprising that policy analysis has diverted social science from a search for innovation (Cox 2002).

CONCLUDING THOUGHTS

To be successful, organisational measures must serve the institution (Selznick 1957), not the organisation. In doing this it elevates the sights of the field away from organisational “results” to the mission and goals of the institution. “Organizations are technical instru-ments, designed as means to definite goals…They are judged on engineering premises; they are expendable… Institutions, whether conceived as groups or practices, may be partly engineered, but they have also a ‘natural’ dimension…They are products of interac-tion and adaptation; they become the receptacles of group idealism; they are less readily expendable” (Selznick 1957:21–22).

Organisations look inward, while institutions look outward. Measuring institutional per-formance should be an outward looking process, i.e. one that is focused on mission.


The goal is to reject current practice and to seek new goals. The mindset is similar to Wildavsky’s (2018:224) “evaluation man”. The ideal member of the self-evaluating or-ganisation is best conceived as a person committed to certain modes of problem solving. He believes in clarifying goals, relating them to different mechanisms of achievement, creating models (sometimes quantitative) of the relationships between inputs and out-puts, seeking the best available combination. “His concern is not that the organization should survive or that any specific objective be enthroned or that any clientele be served” [emphasis added] (Wildavsky 2018:224).

Responsibility versus accountability

One of the blind spots in public management theory is the confusion about responsibil-ity and accountability. Whether it is the emphasis on “accountability systems” promoted by Transparency International or the structuralist approaches that come from traditional organisational theory and leadership theory, the focus is on a retroactive examination of choices and decisions. It is little wonder that public safety forces, among others, view ethics as a “gotcha” process (Johnson and Cox 2014–5). A simple way past this is to understand why Spiro (1959) suggested that accountability was merely a part of the defi-nition of responsibility. Public servants take responsibility for their actions, not by a look back, but rather by the way in which they frame decisions to act (Cox 2000a). As such, how we decide (discretionary judgement), the procedures followed (legal boundaries of action), and willingness to be judged for the choice made (focus on consequences) combine to form what we define as responsibility.

On responsibility

How can public administration, or government, survive cynicism? At one level it prob-ably cannot. It will be a long time before the public will tolerate the aggressive, service-oriented and progressive governments that typified the 1960s. The public (and therefore, many politicians) agrees with Reagan’s one-liner from the 1980s; ‘government is the problem’. But the more critical question is whether the damage is the result of self-inflict-ed wounds, rather than the barbs and rhetoric of politicians. Can we come down from the mountain of elitist expertise to serve the public, even as they continue to criticise? Can we establish a theory of public administration practice that makes democracy more, rather than less viable? Can we be responsive to the public and effective in the delivery of services by listening, rather than deciding?

If we are to create a public administration theory of governance, we must seek to achieve three goals:


●● Public Administration as embodiment/extension of governance●● Politics and democracy as core methods and means of acting●● Ethics as the basis for decision-making

As Philip Selznick (1957) noted more than four decades ago, successful organisations require more than management, they require leadership. The limits of organisation en-gineering become apparent when we must create a structure uniquely adapted to the mission and role of the enterprise. Radical and fundamental kinds of analysis [such as] Plato’s question: “What is justice?”

Policymaking has always been a shared responsibility. Shared governance is not a conveyor belt; it is an iterative and self-reinforcing process of feedback and response. If organisations are to be successful both the formal and the informal aspects of the organisation must be predicated on the following understandings of trust: trust should affirm the organisational-interpersonal link; trust should promote cultural values such as respect, vision, diversity, and empowerment; trust should be built through the applica-tion of the skills of: talent searching, communicating, deciding, self-assessing, enabling, culture creating, and culture affirming.

Miller and Cox (2014) posit that the boundaries of a network emerge as individuals or government recognise shared interests, shared problems and shared history. “This is enough to bring people to the table, but it is not sufficient to get them to agree to act” (Miller and Cox 2014). The barrier is that the emphasis on markets seemingly provides justification to not act. The arrangement becomes a network whose purpose is to obfus-cate and delay.

Contemporary public management theorists underscore the intertwining relation-ship between political imperatives and administrative values (Svara 2001; West 2005; Cook 2014; Demir and Nyhan 2008). Political appointment to senior positions of the bureaucracy is a legitimate path to balance or merge political and administrative values (Heclo 1988; Moe 2006). However, the practice invites scrutiny because of its implica-tions for bureaucratic behaviour or work attitudes (Selden, Ingraham and Jacobson 2001; Bowman and West 2007; Hays and Sowa 2006; Berman et al. 2013). Recent reforms in the US at the state and local government levels accentuate this assumption and, as such, call for a collaborative working relationship between the political authority and the professional bureaucrats. Certainly, trust building remains critical to the new path in public administration (Selden, Brewer, and Brudney 1999; Choudhury 2008; Nyhan 2000; Battaglio and Condrey 2009). Decades ago, the Winter Commission reiterated that greater government performance depended on trust building between politicians


and career bureaucrats (Sanger 2008; National Performance Review 1993). Put simply, the extent of authority, participation, and communication that the bureaucrats experi-ence in their working relations with the political appointee managers are considered fundamental to understand the dynamics of trust.

For organisational integrity to thrive, it is not simply enough to have good people mak-ing good decisions that reflect norms and values. As Six and Huberts (2008) suggested trust is critical. Trustworthiness though is but one aspect of a social relationship that bonds persons together. It is through the expectation and actions of being responsible that a truly professional public service emerges. Ethics and integrity are social constructs that are manifest in the actions of people. It cannot be merely the product of individual choice or individual capacity to reason to an ethical choice. Finding an ethical com-mon ground means to reinforce ethical frameworks at the macro- and micro-levels. The entire premise of Rohr’s regime values for ethical decision-making, grounded in the US Constitution, is to encourage organisational integrity. O’Leary’s caveat about the poten-tial risk of unregulated guerrilla tactics also speaks to the need to ensure organisational integrity even as there is internal conflict.

The normative foundations of public administration are found in the quest to acknowl-edge the importance of democratic values, in having the courage and passion to act on those values, the understanding and skill to manage in an environment of shared power, and the integrity to focus on consequences for others in defining problems. That is what is meant to be responsible in public service.

NOTES

* Prof Raymond Cox III is a Research Associate in the School of Public Management, Governance and Public Policy at the University of Johannesburg, South Africa.

** Prof Peter Haruna is a Research Associate in the School of Public Management, Governance and Public Policy at the University of Johannesburg, South Africa.

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1

For Discussion

1. How does the separation of powers affect the management of public

money in South Africa?

2. Comment on fruitless, irregular and unauthorised expenditure.

3. Why is the allocation of funds a problem for the democratic spending

of public money?

4. The Education Department has an aim of improving literacy in first

graders. To this end they embarked on a project to produce a set

number of storybooks for each school. They reached this target and

efficiently delivered the books to the schools. One year later, when

evaluating this project, officials found out that all the books did arrive

at the allocated schools, but only 20% of teachers used the books to

teach literacy. The other 80% were not sure what to do with the books

and filed them. Would you consider this project a success? Justify your

response.

5. Give two examples of quasi-collective services and discuss why they

fit into this category.

6. In your opinion, should tenders be open for the public to view? Provide

reasons for your answer.

2

CASE STUDY FOR ANALYSIS

Nzama’s Province has a major transport problem. The available methods

of public transport are unsafe and unreliable, while the private forms of

transport are too expensive for most citizens. She has decided to solve

this problem by implementing a new bus system. This system will take 5

years to be fully developed. Using your own general knowledge, create a

cost-benefit analysis of this solution.

university of south africa (unisa) abstract

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