Briefing to the Standing Committee on Public Accounts SCOPA

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Briefing to the Standing Committee on Public
Accounts (SCOPA)
DIRECTOR-GENERAL NATIONAL TREASURY 1 JUNE 2005
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Contents of Presentation
Consolidated financial information
(2004) Unauthorised expenditure Role of National
Treasury with regard to financial management
support to departments Listing of Public Entities
in terms of the PFMA Amendments to the
PFMA Training of finance staff in the public
service SAMDI Financial Management Training
Strategy
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Consolidated Financial Information
Section 8(3) of the PFMA provides for submission
of consolidated financial statements Different
bases of accounting within reporting entities
makes consolidation process complex Two sets of
consolidated financial information presented for
the 2003/04 financial year Resulted in various
qualifications by the Auditor-General Late
submission of information to parliament Various
measures implemented to address the
abovementioned issues
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Unauthorised expenditure
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Unauthorised expenditure (continued)

• Significant increase in 99/00
• Non-compliance with STB (R18,633 in Public
  Enterprises)
• Over expenditure on Personnel (R43,521 in
  Justice)
• Large increase over 2001/02 and 2002/03
• R41,768 in Public Works (budget less than
  contractual leasing obligation)
• R121,937 overspent on Census (Statistics SA)
• R227,008 in Public Works (budget less than
  contractual obligation)
• Some decrease in 2003/04, but still significant
• R40,292 for peace keeping operations not budgeted
  (Defence)
• Contractual obligations giving rise to interest
  payments (DTI R14,186)
• R30,360 in Public Works (budget less than
  contractual obligation)

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Unauthorised expenditure (continued)
Options

• Guided by
• Has the State received value for money
• Has any individual unlawfully gained
• Rulings of STB an individual has been negligent

• Approve unauthorised expenditure and additional
  funds (NRF)
• Approve unauthorised expenditure but recorded as
  expenditure against future years
• Not authorised and should proceed to further
  investigation and attempt to recover

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Unauthorised expenditure (continued)
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Unauthorised expenditure (continued)
The way forward

• Detail recommendations by National Treasury per
  individual case
• Need to improve understanding of SCOPAs
  requirements
• Format of recommendation
• Date of submission

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Financial Management Support to Departments
Section 6(2)(d) of the PFMA provides for the
National Treasury to assist departments in
building capacity for sound financial
management CFO forums (including sector specific)
to address various financial management related
issues Regular visits to departments to discuss
issues raised by the Auditor-General Preparation
of frameworks (Internal Audit, Risk Management)
and related training Preparation of templates for
compiling annual financial statements and
extensive training Participation in audit
committees of departments Internal audit
conference for national, provincial and local
government Secondment of staff of the Office of
the Accountant-General to ensure skills transfer
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Listing of Public Entities

• Section 47 of the PFMA provides for
• The listing of unlisted public entities by
  Minister of Finance
• The accounting authority of a public entity to
  notify the National Treasury if not listed
• Registrar of Public Entities within National
  Treasury responsible for identification of
  unlisted public entities
• Updated list of public entities published in
  government gazette and National Treasurys
  website on an ongoing basis latest 11 April
  2005
• Public entity review recently completed will
  improve processes for classification and listing
  of public entities

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Amendments to the Public Finance Management Act
(PFMA)

• Financial management reform process was still in
  its initial stages of development when PFMA was
  enacted
• National Treasury embark on long process to
  identify all the issues and challenges facing the
  PFMA
• Number of amendments envisaged are numerous and
  largely related to
• Governance review of public entities
• Alignment with MFMA
• Financial management provisions in DORA
• Provisions of PFMA included in Public Audit Act
• Strengthening of performance accountability
• The IMFs report on South Africas Fiscal
  Transparency
• Submission of amendments to parliament October
  2005

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Training of Finance Staff in the Public Service
Formal academic programmes by tertiary education
institutions Providers catering for short-term
training needs Framework for Future Training in
Governmental Financial Management National
Treasurys Validation Board
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Training of Finance Staff in the Public Service
(continued)
PFMA related courses to CFOs and other senior
officials Service Level Agreement with
IPFA Implementation of reforms and related
training Accounting officers responsibility to
employ, train and retain competent staff
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SAMDI Financial Management Training Strategy
Fulfill a more meaningful role with effect from 1
April 2005 Training strategy specifically
developed for financial management Emphasis on
technical financial management training and
financial management training for non-financial
managers Ensure SAQA compliance of training
material. Monitor and evaluate training
programmes Key focus areas for financial
management training identified by National
Treasury National Treasury will provide
assistance to SAMDI on matters related to
financial management training