DEFENCE SPECIAL ACCOUNT AMENDMENT BILL

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DEFENCE SPECIAL ACCOUNT AMENDMENT BILL

• BRIEFING TO
• SELECT COMMITTEE ON SECURITY AND CONSTITUTIONAL
  AFFAIRS
• 7 SEPTEMBER 2005

Mr B.J. Engelbrecht (D Bud) Mr S.H. Njikela (Dep
D Legal Support)
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SCOPE OF BRIEFING

• Introduction.
• Aim.
• Discussion.
• Purpose of Amendments.
• Procedures.
• Terminology.
• Department of State Expenditure.
• Acts of Parliament.
• Gender.
• Amended sections.
• Consultation
• Implications.
• Summary.

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INTRODUCTION

• National Treasury request.
• Focus - Oversight role of the Minister of
  Finance.
• Defence secondary objective updating the Act.

AIM
The aim of this briefing is to brief members of
the Select Committee on Security and
Constitutional Affairs on the recommended changes
to the Defence Special Account Act, Act no 6 of
1974 in order to bring this Act in line with the
gist of the Public Finance Management Act.
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History of the SDA

• Defence Special Equipment Act 1952, Act No 8 of
  1952.
• Main purpose - purchasing main weapon equipment
  and to schedule the cost over years.
• Defence Special Account Act, No 6 of 1974,
  (amended in 1981 and 1995).
• Utilised for defraying expenditure where the
  following conditions exist
• Procurement of Armament.
• Procurement of items usually subjected to
  extended and uncertain lead times.
• The purchase of military equipment.
• Sensitive activities.
• Strategic defence capabilities/weapon systems.

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Matériel

• Category 1
• Matériel designed for military use, or conforms
  to military specifications.
• Normally obtained by means of an acquisition
  process, utilising Special Defence Account funds
  (Folio 02).
• Category 2
• Matériel designed and developed primarily for
  commercial use (commercially available in the
  RSA).
• These items may be used, operated and supported
  without any adaptation in the military
  operational environment.
• Is obtained by means of a procurement process,
  utilising General Defence Account funds (Folio
  01).

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PURPOSE OF AMENDMENTS

• Bring in line with specific Acts of Parliament.
• Remove obsolete references/procedures
• Updating references/procedures.
• Comply with National Treasurys recommendations.

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PROCEDURES

• Section 1A Acc Off may with the prior approval
  of the Minister of Finance enter into
  commitments for the expenditure from the account
  for which money in the account may be utilised in
  terms of section 2(2) but for which no money has
  been provided in the account, and which in the
  aggregate does not exceed the amount shown in the
  estimates of expenditure .
• Section 2(2)(a) The money in the account shall
  with the approval of the Minister of Finance be
  utilise to

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TERMINOLOGY

• Armaments replaced with defence matériel
• Department of State Expenditure replaced with
  National Treasury.
• Treasury is replaced with National Treasury
• Public Debt Commissioners replaced with
  corporation established by section 2 of the
  Corporation for Public Deposits Act, 1984 .

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ACTS

• Auditor General Act, Act No. 52 of 1989
  replaced with Public Audit Act, Act No. 25 of
  2004.
• Armaments Development and Production Act, 1968
  (Act No. 57 of 1968) replaced with Armaments
  Corporation of South Africa Limited Act, 2003
  (Act No. 51 of 2003).
• Defence Act 44 of 1957 replaced with 42 of
  2002.
• Exchequer Act, 1975 (Act No. 66 of 1975)
  replaced with Public Finance Management Act,
  1999 (Act No. 1 of 1999).

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GENDER
SECTIONS AMENDED

• 1(a), (b), and (cA) - amend.
• 1A - delete.
• 2(1)(a), (b) and (c) amend.
• 2(2)(a) and (b) amend.
• 2(4) amend.
• 3 amend.

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CONSULTATIONS

• National Treasury.
• Auditor General.
• State Law Advisor

IMPLICATIONS

• Organisational and personnel None
• Financial - none.
• Minister of Finance no longer directly involved.

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CONCLUSION

1. DSA Act passed in 1974.
2. Last amended in 1995.
3. Does not reflect spirit of the PFMA.
4. Refers to processes no longer valid.
5. Refers to repealed / outdated Acts of
   Parliament.
6. Amendments necessary to bring DSA Act in line
   with new developments in RSA legislation.

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Questions and Discussion