PUBLIC FINANCE MANAGEMENT ACT

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PUBLIC FINANCE MANAGEMENT ACT
AND

• TREASURY REGULATIONS

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KEY OBJECTIVES OF THE PFMA

• Modernise the system of financial management
• Enable public sector managers to manage, but at
  the same time to be accountable
• Ensure timely provision of quality information
• To eliminate waste and corruption in the use of
  public assets

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NATIONAL TREASURY SEC 6 (1) (2)

• Promote and enforce transparency and effective
  management in respect of revenue, expenditure,
  assets and liabilities
• Must prescribe uniform Treasury norms and
  standards
• Must enforce the PFMA and any prescribed norms
  and standards
• May assist departments in building capacity for
  efficient, effective and transparent financial
  management
• May investigate any system of financial
  management and internal control in any department

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RESPONSIBILITIES OF ACCOUNTING OFFICERS (SEC38)

• - Must ensure that the department has and
  maintains
• Effective and efficient systems of financial and
  risk management and internal control
• A system of internal audit under control of an
  audit committee
• An appropriate procurement and provisioning
  system which is fair, equitable, transparent and
  cost effective
• - Responsible for the effective, efficient,
  economical and transparent use of resources of
  the department
• - Must take effective and appropriate steps to
  prevent unauthorized, irregular and fruitless
  and wasteful expenditure and losses resulting
  from criminal conduct
• - Must take effective and appropriate
  disciplinary steps against any official who
• Commits an act which undermines the financial
  management and internal control systems
• Makes or permits an unauthorized, irregular or
  fruitless and wasteful expenditure
• - Delegate in writing any powers or duties to an
  official in the department

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RESPONSIBILITIES OF OTHER OFFICIALS (SEC45)

• - Must ensure that the system of financial
  management and internal control established for
  that department is carried out
• - Is responsible for the effective and
  efficient use of financial and other
  resources
• - Must take effective and appropriate steps to
  prevent unauthorized, irregular and fruitless
  and wasteful expenditure
• - Is responsible for the management, including
  safeguarding of the assets within that
  officials responsibility

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FINANCIAL MISCONDUCT

• - An accounting officer commits an act of
  financial misconduct if willfully or
  negligently fails to comply with a requirement
  of sec 38
• - An official of a department to whom a power or
  duty is assigned in terms of section 44 commits
  an act of financial misconduct if willfully or
  negligently fails to exercise that power or
  perform that duty
• - An official of a treasury to whom a power or
  duty is assigned in terms of section 10
  commits an act of financial misconduct if
  willfully or negligently fails to exercise that
  power or perform that duty
• - An accounting officer is guilty of an offence
  and liable on conviction to a fine or to
  imprisonment for a period not exceeding five
  years, if that accounting officer willfully or
  in a grossly negligent way fails to comply with
  a provision of section 38

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TREASURY REGULATIONS

• Chief Financial Officer (Chapter 2)
• Establish an audit committee (Chapter 3)
• Establish an internal audit unit (Chapter 3)
• Accounting officer must facilitate regular risk
  assessments (Chapter 3)
• Develop and implement a fraud prevention plan
  (Chapter 3)
• Revenue management (Chapter 7)
• Expenditure management (Chapter 8)
• Asset management (Chapter 10)
• Banking and cash management framework (Chapter 15)

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PROCUREMENT SYSTEM

• - Accounting Officer must ensure that his
  department has and maintains an appropriate
  procurement and provisioning system (Sec 38)
• - Cabinet resolved that national provincial
  tender boards should be phased out.
• - Accounting Officers must accept
  responsibility and accountability for AD HOC
  tenders
• - Accounting Officer must submit procurement
  procedures to national treasury for
  accreditation
• - Preferential Procurement Policy Framework Act
  (no 5 of 2000) requires that criteria to be
  applied during evaluation and adjudication
  must form part of tender documents.
• - Procurement reforms aims to strengthen
  accountability, ensure a fair and open system
  and to prevent corruption

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DEPARTMENTAL PFMA IMPLEMENTATION PLANS

• Submission date 31 August 2000
• Appointment of chief financial officer
• Delegation of powers and assignment of duties
• Establishment of internal audit function
• Risk assessment
• Review of departmental prescripts (procedures and
  processes)
• Training of managers on generic financial
  management responsibilities
• Development of strategic plans (2002/3)
• Compliance with reporting standards (2000/2001)