Freeman Nomvalo

1
PROGRESS REPORT ON IMPLEMENTATION OF THE PUBLIC
FINANCE MANAGEMENT ACT
Freeman Nomvalo Accountant-General 29 August 2007
National Treasury
2
CONTENT

• Introduction
• Internal Audit Audit Committees
• Risk Management
• Internal Controls
• Asset Management
• Supply Chain Management
• Performance Information
• Other PFMA related initiatives
• Actual Expenditure for 2006/2007
• Conclusion

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INTRODUCTION

• Implementation of PFMA contributed towards
  enhancement of financial management and
  accountability
• Ongoing PFMA monitoring processes and assessment
  of audit reports of Auditor-General
• Certain disciplines of financial management still
  pose challenges

4
INTERNAL AUDIT FUNCTION

• Survey conducted on the functioning of internal
  audit activities
• Several vacancies still exist within internal
  audit units
• Position of chief audit executive not at
  appropriate level
• Hosted the third public sector internal audit
  indaba
• External service provider appointed to conduct
  quality assurance reviews

5
RISK MANAGEMENT

• Risk Management tool rolled out from August 2006
  has been enhanced.
• Risk Management training to various public sector
  officials
• Risk Management forum established proves to be
  successful in generating interest
• Hosted a risk management symposium for all three
  spheres of government

6
INTERNAL CONTROLS

• Proper and effective internal controls are
  critical for management to meet PFMA requirements
• Progress with finalisation of internal control
  framework slower than expected.
• Outcomes of 2006/2007 audit process will be used
  to update the framework
• Further enhancement of the capability model in
  accordance with the South African public sector
  environment

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ASSET MANAGEMENT

• Departmental asset management plans developed and
  implemented since 2005/2006
• Ongoing engagement with departments to address
  and resolve problems
• High turnover of experienced and trained asset
  management personnel
• Reconciliation between asset registers and
  financial reports remain a problem
• Provide for additional reports and information on
  existing systems

8
SUPPLY CHAIN MANAGEMENT

• Ongoing engagement with all organs of state
  regarding implementation of supply chain
  management reforms
• All non-transversal contracts devolved to
  accounting officers
• In process to align Preferential Procurement
  Policy Framework Act with the Broad-based Black
  Economic Empowerment Act
• Progress with implementation of strategic sourcing

9
PERFORMANCE INFORMATION

• Framework for managing performance information
• Improved accountability and transparency through
  timely, accessible and accurate information
• Facilitate easy auditing of performance
  information by auditors
• Identify performance indicators for tracking
  service delivery against pre-determined
  indicators
• Guides and training manuals to support
  implementation of framework

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OTHER PFMA RELATED INITIATIVES

• Integrated financial management system
• Implementation of generally recognised accounting
  practice
• Early warning report
• Monthly management reports
• Provincial budget preparation and implementation
• Financial distribution and capital asset policies
• Training outside public practice (TOPP) programme

11
ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR
FROM NATIONAL REVENUE FUND
1)
Unaudited figures
1)
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ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR
FROM NATIONAL REVENUE FUND
13
ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR
FROM NATIONAL REVENUE FUND
14
ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR
FROM NATIONAL REVENUE FUND
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CONCLUSION

• Initiatives are consistent with National
  Treasurys responsibilities i.t.o. section
  6(2)(d) of the PFMA
• Committed to exercise its enforcement and
  oversight responsibilities
• Accounting Officers / Authorities remain the main
  role-players to promote and ensure effective
  financial management within their institutions