/ 13 October 2017

Mkhwebane’s R40-million handshake

Millions: Mkhwebane has accrued a gratuity of R2.6-million in five and a half months
Millions: Mkhwebane has accrued a gratuity of R2.6-million in five and a half months

At the end of a non-renewable seven-year term in office, South Africa’s public protector receives a lump-sum payment. When Lawrence Mushwana left the post in 2009 he did so with R6.8-million. Last year Thuli Madonsela received R7.6-million.

At the rate she is going, current protector Busisiwe Mkhwebane will get R40.2-million by the time she is constitutionally obliged to leave in 2023.

Unless she doesn’t stick around for all seven years.

Parliament’s portfolio committee on justice this week agreed to look into Mkhwebane’s fitness to hold office, although the ANC subsequently decried the move as “a witch-hunt designed by the opposition to intimidate her”.

An annual report Mkhwebane presented to the same portfolio committee last week showed she had already accrued a gratuity of R2.6-million — in the five and a half months she had been in office at the end of the financial year on March 31.

Mkhwebane’s office late on Thursday afternoon responded to questions first put on Monday. It confirmed the R2.6-million allocation towards Mkhwebane’s gratuity so far — but said the total gratuity to be paid had not been increased.

“Assuming there is no increase in the public protector’s salary over the next six years, the gratuity provision could remain almost unchanged in 2023-24 when compared to [the] amount paid to former public protector,” said spokesperson Cleopatra Mosana.

The calculation for Mkhwebane was the same as it had been for Madonsela, Mosana said.

Yet the numbers say otherwise.

If the gratuity continued to grow at the same rate as it has during her first half-year in office, it would top R40.2-million by the end of her term.

Adjusting that sum for an inflation rate of 6%, it would put it at 3.5 times more than the gratuity paid to Madonsela.

For Mkhwebane and Madonsela’s gratuities to be equal — in real terms — inflation would have to run at a steady 26.8% for the duration of the current protector’s term in office.

If Mkhwebane were to leave office early, she could potentially lay claim to R2.6-million.

Another alternative is that her institution may be front-loading her gratuity. That would see a large allocation put towards the gratuity at first, then shrinking in subsequent accounting periods.

But it is not clear why this would be done at a time when the office of the public protector’s finances are so dire that the auditor general has expressed concern about its “ability to continue as a going concern”.

Mosana said the the gratuity was not being front-loaded.

Crunching the numbers in a different way suggests Mkhwebane’s gratuity is being over-provisioned nine times, said retired chartered accountant Francis Nicholson after reviewing the annual report at the request of the Mail & Guardian.

According to the public protector’s rules, gratuities are based on salary, and Madonsela received 4.52 times her annual salary in a gratuity, Nicholson’s calculations showed.

To reach the same multiple, he found that the annual provision for Mkhwebane in her first financialyear should have been R280 679. Instead, it was nine times that much.

Ivan Herselman, an advocate who specialise in accountability law with consultancy Argumentum, said the committee that intends to investigate Mkhwebane’s suitability should have signed off on her employment agreement, which should have set out how her gratuity accrues.

“Should the lump sum payment (whether it accrues annually or once-off), however, be severely disproportionate to that received by previous public protectors, without a rational basis for differentiation, the decision could very well be unlawful,” he said.

If MPs had signed off on such a gratuity, Herselman said, little can be done now — unless it could be shown that they voted irrationally in terms of their own ethics rules.

“If, however, the increase in the lump sum was not sanctioned by the National Assembly, but was the product of an ultra vires [out of its powers] decision by the minister of constitutional development or the public protector, the Executive Members Ethics Act or the Public Finance Management Act could come into play — and if payments were effected in terms of such an unlawful decision, the decision-makers could theoretically, on demand or legal action, be required to ‘pay back the money’ into the state coffers.”

Mkhwebane’s office said a rescheduled meeting with the Cabinet to discuss the code of ethics that bounds ministers and sets limits on their use of public resources — which is policed by the public protector — took place on May 24.

“The public protector would not be able to provide [an] attendance register,” Mosana said.

Asked which ministers were present, the government communications office said it could “only communicate on matters that have served before Cabinet and a decision taken”.

In a foreword to the annual report dated August 31, Mkhwebane said her vision for her office was “to ensure that we dedicate more of our time and resources to our services being filtered to communities living on the margins of society”.