Ex parte:

OFFICE OF THE AUDITOR-GENERAL

In re:

THE FUNCTIONS OF THE AUDIT COMMISSION IN RELATION TO THE AUDITOR-GENERAL

OPINION

INTRODUCTION

  1. We have been asked by the OFFICE OF THE AUDITOR-GENERAL ("the Office") to provide an opinion on the following questions, which have arisen in the context of the drafting of the Auditor-General Bill ("the AG Bill"):

    1. If the Audit Commission is to continue to exist in the form provided by Chapter 7 (sections 29 to 32) of the AG Bill, which of the functions provided for in section 30 thereof would be inappropriate in the light of section 181 of the Constitution of the Republic of South Africa, 1996 ("the Constitution"), and especially subsection 181(2)?
    2. Could the nature of the oversight and accountability applicable to the Auditor-General be different from the oversight and accountability to which the executive, the state departments and the public administration are subject?
    3. What does the accountability of the Auditor-General to the National Assembly, in terms of section 181(5) of the Constitution entail?
    4. Given that the income of the Auditor-General is currently generated by directly charging the entities audited and that no funds are appropriated by Parliament, is there any need for the budget of the Auditor-General to be approved by Parliament; and if so would the approval process not be benefited by the advisory role of a body such as the Audit Commission?

  1. For the purposes of this opinion, we have had the benefit of a brief consultation with representatives from the Office, as well as an informative written legal brief. We have also been provided with: the AG Bill; a copy of a letter, dealing with the Auditor-General and the Office, that was sent to Professor Corder on behalf of the Deputy Auditor-General; and the New Zealand Public Audit Act 2001, the United Kingdom Audit Commission Act 1998 and the State of Victoriaís Audit Act 1994.
  2. We shall deal with the questions posed in the order set out above. We shall, however, combine our answers to questions 2 and 3 in order to avoid repetition.
  3. QUESTION ONE: WHETHER THE FUNCTIONS ENVISAGED FOR THE AUDIT COMMISSION ARE CONSTITUTIONAL

  4. The Audit Commission Ė which was established by section 12 of the Audit Arrangements Act, 122 of 1992 Ė at present performs a number of functions provided for in the Audit Arrangements Act and the Auditor-General Act, 12 of 1995. These functions primarily relate to the oversight of the Office and of the Auditor-General, as well as certain ancillary duties. We have been informed that the Audit Commission has performed these functions very effectively and has played an increasingly active and constructive role as the quasi-governing body of the Office (which is currently a separate juristic person in terms of section 3 of the Audit Arrangements Act).
  5. The AG Bill makes provision, in section 29, for the establishment of a new body called the Audit Commission, which is composed along the same lines as before, and whose members will continue to be appointed by the President. In section 30 of the AG Bill, various functions are allocated to the Audit Commission. These functions are, to a large extent, comparable to ones already performed by the Audit Commission under the existing legislation, although a somewhat less extensive role is seemingly envisaged for the Audit Commission under the AG Bill.
  6. We have been advised that, notwithstanding the modified role envisaged for the Audit Commission in the AG Bill, the appropriateness of the Audit Commission performing all the functions enumerated in section 30 of the AG Bill in the light of the Constitution has been queried. We have accordingly been asked to advise on whether the role and functions that are envisaged for the Audit Commission in the AG Bill are constitutional. In order to address this issue, we shall first summarize certain principles applicable to the Auditor-General, which provide the framework for the discussion. We shall then quote the applicable provisions of the AG Bill. Thereafter, we shall analyze the constitutionality of those provisions, and thus the constitutionality of the functions that it is proposed that the Audit Commission will perform.
  7. The Constitutional Framework

  8. The Auditor-General is one of the state institutions established in terms of Chapter 9 of the Constitution to "strengthen constitutional democracy". As a result, there are three "governing principles" applicable to the Auditor-General: independence, impartiality and effectiveness.
    1. These principles are enshrined in section 181 of the Constitution, subsections (2) to (4) of which provide that:

      1. These institutions are independent, subject only to the Constitution and the law, and they must be impartial and must exercise their powers and perform their functions without fear, favour or prejudice.
      2. Other organs of state, through legislative and other measures, must assist and protect these institutions to ensure the independence, impartiality, dignity and effectiveness of these institutions.
      3. No person or organ of state may interfere with the functioning of these institutions.

    1. The Constitutional Court has also emphasized the importance of these principles. For example, in paragraph [165] of the Ex parte Chairperson of the Constitutional Assembly: In re Certification of the Constitution of the Republic of South Africa, 1996 1996 (4) SA 744 (CC), the Constitutional Court stated that the role of the Auditor General "requires a high level of independence and impartiality, as is recognised by [Constitutional Principle] XXIX". In paragraph [142] of the Ex parte Chairperson of the Constitutional Assembly: In re Certification of the Amended Text of the Republic of South Africa, 1996 1997 (2) SA 97 (CC), the Constitutional Court reiterated that the Auditor-General, and the Public Protector, "perform sensitive functions which require their independence and impartiality to be beyond question, and to be protected by stringent provisions in the Constitution". (For the importance of independence, impartiality and effectiveness in relation to the Electoral Commission, another state institution established by Chapter 9 of the Constitution, see New National Party of South Africa v Government of the Republic of South Africa 1999 (3) SA 191 (CC) at par [74]-[79], per Langa DP.)
    2. In similar vein, the Constitutional Court held, in Independent Electoral Commission v Langeberg Municipality 2001 (3) SA 925 (CC) at paragraphs [26]-[31], that a State institution established in terms of Chapter 9 of the Constitution to support constitutional democracy is independent of national, provincial or local government, rather than "functionally interdependent and interrelated" with any of those spheres of government.

  1. As we mentioned in an earlier opinion that we furnished to the Office (in relation to another clause in the AG Bill), independence in this context would appear to comprise at least the following elements: security of tenure, (a basic degree of) financial security, and institutional and administrative independence. (See, in this regard, in relation to the judiciary, to which similar principles apply: De Lange v Smuts NO and Others 1998 (3) SA 785 (CC) at par [67]-[73]; Freedom of Expression Institute v President, Ordinary Court Martial 1999 (2) SA 471 (C) at 481H-483E; Van Rooyen and Others v The State and Others 2002 (8) BCLR 810 (CC) at par [19]-[32]; R v Valente [1985] 2 S.C.R. 673, (1985) 24 DLR (4th) 161 (SCC); The Queen in Right of Canada v Beauregard [1986] 2 S.C.R. 56, (1986) 30 DLR (4th) 481 (SCC); and Manitoba Provincial Judges Association v Manitoba (Minister of Justice) [1997] 3 S.C.R. 3, (1997) 150 DLR (4th) 577 (SCC).)
  2. Financial security and institutional and administrative independence require inter alia that the Auditor-General have access to sufficient funds to discharge its obligations and duties effectively; that the Auditor-General not be required to meet stipulated conditions before it gains access to such funds; and that the Auditor-General (and not the executive arm) have control over those matters, and those staff, that are directly linked with the discharge of the Auditor-Generalís responsibilities.
  3. The independence of the Auditor-General (and the other Chapter 9 state institutions) is further enhanced by section 191(5) of the Constitution, which does not make the Auditor-General answerable to the executive, but instead provides that:
  4. These [Chapter 9] institutions are accountable to the National Assembly, and must report on their activities and the performance of their functions to the Assembly at least once a year.

  5. The security of tenure of the Auditor-General is protected by section 189 of the Constitution, which provides that the Auditor-General "must be appointed for a fixed, non-renewable term of between five and ten years", and the fact that, in terms of section 194 of the Constitution, the Auditor-General may only be removed from office on a few specified grounds and with a supporting vote of at least two-thirds of the members of the National Assembly.
  6. Relevant Provisions in the AG Bill

  7. Section 30 of the AG Bill is directly relevant to the question that we are currently addressing in this opinion. Section 29 is, however, also important for reasons that we shall shortly explain. We shall therefore quote both of these sections before commencing our analysis.

ESTABLISHMENT OF THE AUDIT COMMISSION

29. (1) There is hereby established a commission to be known as the Audit Commission.

      1. The Audit Commission consists of -

(a) eight members of Parliament

      1. one of whom must be the Chairperson of the Standing Committee on Public Accounts;
      2. at least two of whom must be permanent delegates of the National Council of Provinces;

appointed for a period of not more than five years, as may be determined in each case at the time of the appointment, who must not be members of the executive authority or attached to the state administration, and whose knowledge of and experience in auditing, financial management and administration, and membership of the political parties represented in Parliament at the time of each appointment, must also be taken into consideration;

(b) three persons of stature and good character, none of whom shall be a member of Parliament or the executive authority or attached to the state administration, appointed by the President, after consultation with the relevant profession or professions, for such period, not exceeding five years, as may be determined in each case at the time of the appointment and whose knowledge of and experience in auditing, state finance and administrative affairs must be taken into consideration.

      1. Members referred to in subsection (2)(a) must be nominated by the Presiding Officers, after consultation with the political parties in Parliament, and appointed by the President.
      2. The President, after consultation with the Presiding Officers must, appoint one of the members appointed in terms of section 29(2)(a) as the chairperson of the Audit Commission.

FUNCTIONS OF AUDIT COMMISSION

30. (1) (a) The Audit Commission must perform the functions assigned to it by or in terms of this Act.

(b) A member of the Audit Commission must act with fidelity, honesty, integrity, and in the best interests of the Office of the Auditor-General.

      1. The Audit Commission mustó

      1. review the operational strategy, and approve the estimates of revenue and expenditure of the Office of the Auditor-General in accordance with section 22;
      2. appoint the external auditor of the Office of the Auditor-General in accordance with section 25;
      3. determine the conditions of employment of the Auditor-General at the time of his or her appointment in accordance with section 12;
      4. examine the annual report of the Office of the Auditor-General within two months of receipt of the Annual Report and report thereon to Parliament in terms of section 30(2)(j);
      5. monitor the compliance by the Auditor-General with applicable auditing standards in accordance with section 4(1)(b);
      6. assist the Auditor-General in the appointment of the Chief Executive Officer in accordance with section 15;
      7. approve the basis of the audit fee, determined in accordance with section 24;
      8. monitor the performance of the Office of the Auditor-General;
      9. approve the provision of services commonly performed by a supreme audit institution or an external auditor in accordance with section 4(3);
      10. annually submit to the National Assembly a report on the Audit Commissionís activities and the performance of its functions; and
      11. approve the auditing standards, having taken into consideration international standards, and the code of professional conduct in accordance with section 4(1)(b).
      12. approve the framework for remuneration of all employees submitted by the Auditor-General in terms of section 28(2).

Appropriateness of Audit Commissionís Functions

The oversight function

  1. It is apparent from the constitutional framework that no organ of state or any other entity is permitted to dictate to the Auditor-General how he (or she) should perform his (or her) responsibilities. Furthermore, the Auditor-General cannot be called to account by any body or group except the National Assembly, to whom it is obliged to report at least once a year, and which can, in certain limited circumstances, vote to sanction the Auditor-General.
  2. Consequently, the functioning of the office of Auditor-General and the exercise of its powers and functions cannot be subject to the Audit Commission. It is impermissible for the Audit Commission to be the overseer or monitor of the Auditor-General, or the quasi-governing body of the Auditor-Generalís staff. It is also constitutionally unacceptable for the Auditor-General to have to seek the approval of the Audit Commission in relation to the performance of his powers or functions.
  3. This is all the more so because, as is apparent from section 29 of the AG Bill, the Audit Commission is not simply a portfolio committee or a sub-committee in the National Assembly, and thus is not an adjunct of the National Assembly. The Audit Commission is a separate eight-person commission, which is appointed by the President, and which is comprised of at least two delegates from the National Council of Provinces ("the NCOP"), and three (expert) persons, who are not members of either the National Assembly or the NCOP and who are presumably intended to have knowledge of and experience in auditing, state finance and administrative affairs. Thus, at least five of the commissionís eight members will not be members of the National Assembly, despite the National Assembly being the only body that is constitutionally permitted to engage in any "performance assessment" of the Auditor-General and his or her staff.
  4. Nor can the Audit Commissionís oversight role be justified on the basis that it is predominantly concerned with oversight of the Office, rather than the Auditor-General himself. The state institution envisaged by Chapter 9 of the Constitution cannot simply be regarded as the Auditor-General on his own; nor can the protections accorded to the Auditor-General under that Chapter be regarded as applying only to the person of the Auditor-General rather than his staff. The idea of a separate juristic person comprising the Office of the Auditor-General would indeed seem to be an unwieldy and potentially problematic one in the light of Chapter 9 of the Constitution.
  5. In any event, we have been advised by the Office that it has been decided during the drafting of the AG Bill that the separate identities and existence of the Office and the Auditor-General are no longer necessary, or even permissible, in the light of the Constitution. It is therefore apparently proposed to merge the Office with the post of Auditor-General, with the Auditor-General being the head of the state institution referred to in Chapter 9 of the Constitution, and the Deputy Auditor-General being the accounting officer. The necessary amendments would not yet appear to have been made to the AG Bill (see section 14 thereof, as well as the definition of the term in section 1), but the AG Bill will presumably shortly be changed so as to remove the present references to the Office of the Auditor-General as a separate juristic person.
  6. A supporting and protecting role

  7. Notwithstanding what we have stated above in relation to the principles and constitutional provisions applicable to the Auditor-General, the Constitution does not preclude the Audit Commission from performing any role in relation to the Auditor-General.
  8. In terms of section 181(3) of the Constitution, the Audit Commission is undoubtedly permitted to assist and protect the Auditor-General in order to ensure the independence, impartiality, dignity and effectiveness of that institution. It may do so provided it does not trespass on the independent functioning of the Auditor-General. As we have pointed out above this supporting and protective role is one that the Audit Commission has fulfilled most effectively.
  9. In addition, the Audit Commission can possibly also assist Parliament and ensure that the Auditor-General is accountable to it. It would probably be preferable, constitutionally, for a committee of the National Assembly to perform this task; but from a practical perspective, it may be that a body such as the Audit Commission, which has external members, would be better suited thereto. Accordingly, Parliament can pass legislation that allows the Audit Commission to assist it hold the Auditor-General accountable.
  10. The section 30(2) functions

  11. Against this backdrop, we turn to consider the functions allocated to the Audit Commission in section 30(2) of the AG Bill.
  12. Subsection 30(2)(a) appears to us to be constitutionally problematic. The Audit Commission cannot be given the power to "approve the estimates of revenue and expenditure of the Office of the Auditor General" [emphasis added]. That being so, there is also seemingly no need for the Audit Commission to review the operational strategy of the Office. We would therefore suggest that this subsection be deleted. If it is not to be deleted it should be amended in such a way that the budget is not made subject to the Audit Commissionís approval. We also point out, in relation to this and other subsections of section 30, that the reference to the Office of the Auditor-General may have to be rethought in the light of the proposed disappearance of the Office as a separate person.
  13. Subsection 30(2)(b) is on balance acceptable, although it would be preferable, constitutionally, for the Audit Commission to advise the National Assembly on who the external auditor should be. This is because, in terms of the Constitution, the Auditor-General is accountable to the National Assembly, rather than to the Audit Commission.
  14. In subsection 30(2)(c), too, the Audit Commission is entrusted with a task that, constitutionally, should probably be performed by another person or body: in this case, either the President (who appoints the Auditor-General on the recommendation of the National Assembly) or the National Assembly. It would therefore be preferable for the Audit Commission to advise on the conditions of employment, rather than determine them.
  15. Subsection 30(2)(d) does not raise constitutional concerns.
  16. The functions allocated to the Audit Commission in subsection 30(2)(e), read with section 4(1)(b) of the AG Bill, are again potentially inconsistent with the Constitution. Whether or not section 4(1)(b) requires the Auditor-General to make the determinations contemplated by that subsection with the concurrence of the Audit Commission, the Auditor-General should not need to have to determine "the standards to be applied to an audit" (section 4(1)(b(i) "in consultation with the Audit Commission". There is nothing to preclude Parliament from having the Audit Commission monitor the Auditor-Generalís compliance with applicable audit standards and then report back to the National Assembly. Requiring the Audit Commission to determine the audit standards in consultation with the Audit Commission is another matter.
  17. Subsection 30(2)(f), as phrased, poses no difficulties. However, section 15 of the AG Bill, to which it refers, stipulates that the Auditor-General may only appoints the Chief Executive Officer "with the consent of the Audit Commission". That restriction would appear to us to be unconstitutional.
  18. The requirement of concurrence in subsection 30(2)(g) is constitutionally problematic. After reviewing the Auditor-Generalís annual report, with the assistance of the Audit Commission, the National Assembly can legitimately call the Auditor-General to account over his audit fees. But the Audit Commission cannot control the amount of the audit fee that is charged to the body being audited.
  19. Subsection 30(2)(h) is somewhat difficult to reconcile with the apparent acceptance by the drafters of the AG Bill that the Office will disappear as a separate entity (and juristic person). We should nevertheless reiterate that the idea of a body like the Audit Commission monitoring the performance of the Auditor-Generalís staff is seemingly not envisaged by the Constitution. What the Constitution instead contemplates is the Auditor-General reporting at least annually to the National Assembly, which can then question the Auditor-General on the performance of his staff.
  20. The fact that the Audit Commission has been given the power, in subsection 30(2)(i), to "approve" the provision of additional auditing services is potentially a problem. If it is considered desirable to be able to curtail the kind of services that the Auditor-General can provide, it would be better if this power lay with the National Assembly.
  21. Subsection 30(2)(j) is unobjectionable, although it does not indicate how the Audit Commission will be able to compile the report in question. If the report is to be prepared on the basis of a close and persistent monitoring of the Auditor-Generalís performance, and of that of his staff, then this would, in our view, be unconstitutional.
  22. Subsection 30(2)(k) raises the same constitutional difficulties that have been canvassed with reference to section 30(2)(e) above.
  23. Whether the Audit Commission can permissibly have the power, in terms of subsection 30(2)(l), to "approve" the framework for remuneration of the Auditor-Generalís employees is questionable. Once again, it would be preferable for the Auditor-General to have the power to act alone, subject to being able to be called to account by the National Assembly (possibly on the advice of the Audit Commission).
  24. QUESTIONS TWO AND THREE: THE NATURE OF THE AUDITOR-GENERALíS ACCOUNTABILITY

  25. As we have noted, section 181(5) of the Constitution provides that the Auditor-General is accountable to the National Assembly. What exactly this accountability entails, and to what extent this accountability is different from that which is applicable to the executive and the state departments is an issue we must now consider.
  26. The Auditor-Generalís accountability

  27. We have not been able to find any case law dealing with the nature of the accountability envisaged by section 181(5) of the Constitution. It is therefore necessary to analyze the nature of the Auditor-Generalís accountability with reference to linguistic, textual and contextual considerations.
  28. The word "accountable" is defined in The New Shorter Oxford English Dictionary, Vol 1 "A-M", as meaning inter alia: "Liable to be called to account; responsible". Thus, what is seemingly meant by the Auditor-General being accountable to the National Assembly is that the Auditor-General has to answer to the National Assembly for his or her actions, performance and conduct. This in turn means that the National Assembly can request that the Auditor-General appear before it and address any issues that concern members of the National Assembly. The National Assembly can also take the Auditor-General to task if his performance is inadequate or unsatisfactory and, in extreme cases, can vote on a resolution calling for the Auditor-Generalís removal from office (section 194(1)(c) of the Constitution).
  29. The fact that the Auditor-General is accountable to the National Assembly does not, however, mean that the National Assembly can appoint a watchdog to monitor the Auditor-General and his staff. The Constitution instead contemplates that the Auditor-General will provide the information needed by the National Assembly by means of reports, which are to be submitted at least annually. It is these reports that are intended to enable the National Assembly to review the performance of the Auditor-General and to assess his compliance with his constitutional and statutory obligations.
  30. Accountability for the purposes of section 181(5) of the Constitution is thus achieved by means of: (1) reports by the Auditor-General, and (2) the review and assessment of these reports by the National Assembly, assisted where appropriate by a parliamentary sub-committee.
  31. This model of accountability is in accord with what is provided for in the New Zealand Public Audit Act 2001 and the Audit Act 1994 of the State of Victoria (in Australia).
    1. Part 6 of the New Zealand Act (sections 36 to 38) is headed "Accountability". Under this portion of the Act, provision is made for the submission by the Auditor-General of an "Annual Plan" (section 36), and of an "Annual Report" (section 37). The remaining section of Part 6, section 38, concerns the appointment by the House of Representatives each year of an independent auditor to audit the financial statements, accounts and other information relating to the Auditor-General.
    2. Part 2, Division 2, of the Victorian Act (sections 7A to 7D) is titled "Accountability and Reporting". Section 7A relates to the "Auditor-Generalís annual plan", a draft of which must be submitted before the beginning of each financial year. Section 7B regulates the preparation and transmission of the Auditor-Generalís "Annual Report", which has to be completed as soon as practicable after the end of each financial year.

    The accountability of the Executive and the State Departments

  32. The Office has suggested that the nature of the accountability contemplated by section 92 of the Constitution (which is applicable to the national executive) is different from the kind of accountability envisaged by section 181(5) of the Constitution (which applies to the Auditor-General and other state institutions supporting constitutional democracy). By way of support for this proposition, we have been referred to the New National Party judgment (supra) (and particularly to Deputy President Langaís comments, in paragraph [78], that: "If this means that old legislative and policy arrangements, public administration practices and budgetary conventions must be adjusted to be brought in line with the new constitutional prescripts, so be it"), as well as to the fact that, in terms of the IEC v Langeberg Municipality judgment (supra), the Auditor-General, as a Chapter 9 constitutional institution, is not part of national government.
  33. It is correct that the Chapter 9 institutions (such as the Auditor-General) are not organs of state in a sphere of government for the purposes of Chapter 3 of the Constitution. Nevertheless, there would not, in our view, be much difference between the kind of accountability to which the executive is subject in terms of section 92 and the nature of the accountability to which the Auditor-General is subject under section 181(5) of the Constitution.
  34. Section 92 of the Constitution, which is headed "Accountability and responsibilities" provides, in respect of the national executive, that:

      1. The Deputy President and Ministers are responsible for the powers and functions of the executive assigned to them by the President.
      2. Members of the Cabinet are accountable collectively and individually to Parliament for the exercise of their powers and the performance of their functions.
      3. Members of the Cabinet must Ė

      1. act in accordance with the Constitution; and
      2. provide Parliament with full and regular reports concerning matters under their control.

  1. There are notable similarities between sections 92 and 181(5) of the Constitution. Both consider the reporting functions of the persons who are being held accountable to be integral components of the accountability process. Both also render the institutions in question accountable to the legislature (although in the case of the executive, it is accountable to the whole Parliament, rather than the National Assembly). Furthermore, in terms of section 102(1) of the Constitution, the National Assembly can force the President to dissolve the Cabinet by passing a motion of no confidence, while in terms of section 102(2), the National Assembly can, with a special majority, force the President, the Deputy President and the Cabinet to resign. Section 102 of the Constitution is thus comparable, as far as the executive is concerned, with section 194 of the Constitution, which deals with the power of the National Assembly to effect the removal from office of the Auditor-General.
  2. We therefore consider that the term "accountable" should be given a similar meaning in section 92 and section 181(5) of the Constitution. Further strengthening this conclusion is the fact that one of the standard presumptions of statutory interpretation is that the same words and phrases in a statute bear the same meaning throughout. (See, for example, South African Transport Services v Olgar and Another 1986 (2) SA 684 (A) at 688 and the authorities there cited.) In our view, there are no compelling reasons to depart from that presumption in this case.
  3. The difference between the accountability of the executive branch and the Auditor-General is therefore not a qualitative one, but rather one of degree. The executive is required, in terms of section 92(3)(b) of the Constitution, to provide Parliament with "full and regular reports concerning matters under their control". By contrast, the Auditor-General is only obliged to report to the National Assembly once a year, in terms of section 181(5) of the Constitution. Parliament therefore has more frequent information from the Cabinet than from the Auditor-General and is able to keep closer tabs on the executive.
  4. QUESTION FOUR: WHETHER THE BUDGET OF THE AUDITOR-GENERAL HAS TO BE APPROVED BY PARLIAMENT

  5. The final question on which our advice is sought relates to the approval of the Auditor-Generalís budget. We have been informed that the income of the Auditor-General is currently generated from fees charged by the Auditor-General to the entities audited, and that no funds are appropriated by Parliament. In the circumstances, the question arises as to whether there is any need for the Auditor-Generalís budget to be approved by Parliament.
  6. It is not unconstitutional for Parliament to approve the budget of a Chapter 9 institution. Indeed, if the institution is dependent on funds from the National Revenue Fund, Parliament has to approve the institutionís budget for the forthcoming year. (Thus, in New Zealand and the State of Victoria, where the Auditor-General receives appropriations, the legislature approves the Auditor-Generalís budget.). Constitutional difficulties only arise where a particular government department is able to control the flow of funds to a Chapter 9 institution (see New National Party (supra) at par [76]-[78]).
  7. On the other hand, if the Chapter 9 institution is not dependent on any funds from the National Revenue Fund, there is no reason, in our view, why the institutionís budget should nevertheless be subject to scrutiny and approval in advance. Section 181(5) of the Constitution does not require this; it is sufficient that a report be submitted by the institution concerned after the close of a financial year, reporting on the income and expenditure for that year. The independence of the Chapter 9 institution would moreover potentially be enhanced if the institution had complete freedom in relation to its budget.
  8. We are accordingly of the opinion that, when the Auditor-General is not dependent on any funds being appropriated by Parliament, the AG Bill should not require that the National Assembly approve the Auditor-Generalís budget. It would, however, probably be prudent to cater for the possibility that the Auditor-General may need funds from the national revenue at some stage. Provision should therefore be made for that eventuality in the AG Bill. In those instances Ė i.e., where the Auditor-General requires national funds Ė approval of the Auditor-Generalís budget would be required by Parliament. The Auditor-General would therefore be obliged to submit a draft budget to the Minister of Finance in sufficient time before the start of the financial year to which it relates.
  9. Where there is a need for the Auditor-Generalís budget to be approved by the National Assembly, there would not seem to be any basis for precluding the Audit Commission from assisting the National Assembly (and, albeit indirectly, the Auditor-General). As we have discussed earlier in this opinion, we do not interpret the Constitution as necessarily precluding the Audit Commission from playing an advisory role. It is merely when the Audit Commission is accorded a prescriptive or authoritative function that the Auditor-Generalís independence and the National Assemblyís oversight function are compromised.