Implementing The Public Finance Management Act In South Africa

The implementation of the Public Finance Management Act (PFMA), 1999 is reviewed in this book, focussing on the development and reform of financial governance arrangements after 2000. South Africa has a long way to go to ensure that financial reforms are translated into service delivery gains. Implementing reforms and making sure that citizens benefit is proving difficult, yet the convergence of various government agencies in addressing financial governance is beginning to inspire the kind of confidence needed to overcome the country's financial governance challenges. The authors find that, despite the challenges, the PFMA has begun to make a difference and, if properly implemented, may still provide the ground for a fundamental transformation of public-sector service delivery.

In South Africa, the Public Finance Management Act, 1999 (Act No. 1 of 1999) is a piece of legislation that is flexible and adaptable compared to the repealed Exchequer Act (Act No. 66 of 1975), which was prescriptive and rule driven. The administration of finance in the public sector involves numerous challenges such as the lack of adequate capacity, integrity of personnel and unqualified personnel. Solutions are sought simultaneously for prospects to achieve value for money through economy, efficiency and effectiveness. Those who manage public affairs and public finance are subject to public scrutiny. Transparency, accountability and honesty as well as prudence in the management and administration of public finance are imperative. The problem statement is divided into the following research questions: What is the PFMA (Public Finance Management Act) and how is it administered? How is the PFMA administered in the North West Provincial Administration? In order to research the above-mentioned problem and sub-problem, the following objectives were formulated: Determine from the literature the nature and scope of the PFMA and its administration; establish the reason for the introduction of PFMA in South Africa; and determine the administration of the PFMA in the North West provincial administration. In implementing policy, the following elements were considered: The availability of trained personnel, administrative arrangements to implement policy, material resources required for proper implementation, procedures and directives for effective implementation, role of auditing staff, and both internal and external, role of independent institutions such as the Public Service Commission, Provincial Public Accounts Committee and the Auditor-General (AG). The managerial control and fiduciary duties by the structures in government departments will have to be enhanced in order to ensure that financial management is aligned with the PFMA. Policy implementation requires the necessary tools, techniques, procedures, shared vision, strategy, structure, systems, skills and staff. The study critically determines and establishes various challenges experienced while managing finances through the administration of the PFMA. From the data gathered, analysis and interpretations were derived to arrive at the findings, interpretations, inferences and recommendations. There is evidence of financial qualifications in the audit opinion, shortcomings in various departments, capacity constraints, and a lack of a clear trail of supporting documentation, ineffective leadership, supervision, monitoring and support. Appropriate recommendations are provided to remedy the situation.

The Public Finance Management Act (PFMA) was put in place to ensure that accounting officers are regulated in their exercise for responsibility over public funds under their care. This study identifies Information Technology control objectives for implementing the Public Finance Management Act no. 1 of 1999 as amended by the Public Finance Management Amendment Act No. 29 of 1999 and aim to establish if Control Objectives for Information and related Technologies (COBIT) can be used to implement the Act in the National Departments and other institutions of the South African Government.

Why South African civil service is relatively efficient and effective despite affirmative action and nepotism of the ruling African National Congress (ANC)? Existing literature has explained that Public Finance Management Act (PFMA) and Municipal Finance Management Act (MFMA) calm the negative effects of affirmative action and nepotism down. However, they do not empirically assess whether PFMA and MFMA work as designed. This study constructs a newly original dataset based on the Auditor-General's reports to evaluate the reality of the implementation of these laws. It finds four points: First, most public institutions comply with PFMA and MFMA; second, inappropriate expenditure is little; third, compliance is different from province to province, institution to institution; and fourth, so-called Section 139 intervention of the Constitution is not enough conducted. Then, this research concludes that PFMA and MFMA are relatively well implemented except for some reservations. The article remains with problems and weak points due to resource availability. However, it contributes to strengthening the arguments of the existing literature based on comprehensive and empirical data.

The first two decades of the twenty-first century have witnessed an influx of innovations and reforms in public financial management. The current wave of reforms is markedly different from those in the past, owing to the sheer number of innovations, their widespread adoption, and the sense that they add up to a fundamental change in the way governments manage public money. This book takes stock of the most important innovations that have emerged over the past two decades, including fiscal responsibility legislation, fiscal rules, medium-term budget frameworks, fiscal councils, fiscal risk management techniques, performance budgeting, and accrual reporting and accounting. Not merely a handbook or manual describing practices in the field, the volume instead poses critical questions about innovations; the issues and challenges that have appeared along the way, including those associated with the global economic crisis; and how the ground can be prepared for the next generation of public financial management reforms. Watch Video of Book Launch

Public Budgeting in African Nations aims to provide usable budgeting and fiscal policy management information to development practitioners interested in improving the performance of governments in the context of good governance. It shares regional and cross-cultural experiences with international audiences and gives reflective attention to comparative budgeting and fiscal policy management. With a promising economic and fiscal forecast, such information is timely for international development practitioners and for scholars and researchers interested in advancing development management. This book adopts an interdisciplinary/pragmatic approach to analyze and present research findings on public budgeting as a sustainable development tool. The central argument is that development practice will benefit from a bottom-up, decentralized approach to budgeting and fiscal policy management, involving national, sub-national, and civil society institutions. From this perspective, a balanced budget should draw from and reflect values and priorities across the full spectrum of social and political life.

This project, based on the Public Expenditure and Financial Accountability (PEFA) data set, researched how PEFA can be used to shape policy development in public financial management (PFM) and other major relevant policy areas such as anticorruption, revenue mobilization, political economy analysis, and fragile states. The report explores what shapes the PFM system in low- and middle-income countries by examining the relationship between political institutions and the quality of the PFM system. Although the report finds some evidence that multiple political parties in control of the legislature is associated with better PFM performance, the report finds the need to further refine and test the theories on the relationship between political institutions and PFM. The report addresses the question of the outcomes of PFM systems, distinguishing between fragile and nonfragile states. It finds that better PFM performance is associated with more reliable budgets in terms of expenditure composition in fragile states, but not aggregate budget credibility. Moreover, in contrast to existing studies, it finds no evidence that PFM quality matters for deficit and debt ratios, irrespective of whether a country is fragile or not. The report also explores the relationship between perceptions of corruption and PFM performance. It finds strong evidence of a relationship between better PFM performance and improvements in perceptions of corruption. It also finds that PFM reforms associated with better controls have a stronger relationship with improvements in perceptions of corruption compared to PFM reforms associated with more transparency. The last chapter looks at the relationship between PEFA indicators for revenue administration and domestic resource mobilization. It focuses on the credible use of penalties for noncompliance as a proxy for the type of political commitment required to improve tax performance. The analysis shows that countries that credibly enforce penalties for noncompliance collect more taxes on average.

This book explores the concept and practice of intergovernmental fiscal relations in South Africa, with particular reference to capacity building towards assisting municipalities and improving their readiness to implement the Municipal Finance Management Act (MFMA). The main purpose of the research project is to investigate the readiness of South African Local Government structures in implementing the Municipal Finance Management Act (MFMA), to evaluate successes and challenges so far, as well as to sketch a way forward with regard to the further capacitation of municipalities in order to assist them to implement the MFMA successfully in the medium to long term. The study employs both qualitative and quantitative methods of data collection, including secondary sources, which comprise government (departmental) reports and policy documents, National Treasury MFMA circulars, as well as library books and journal articles. The primary sources used are survey questionnaires from municipal managers and interviews with officials of the National Treasury, North West Provincial Treasury, and the Department of Local Government and Housing.

?Financial Management Information Systems: 25 Years of World Bank Experience on What Works and What Doesn?t? was prepared as an updated and expanded version of the FMIS review report drafted in 2003, to highlight the achievements and challenges observed during the design and implementation of Bank funded FMIS projects since 1984.