Speech by Mr Hennie Bekker MP
Joint Budget Committee Report

7 May 2008

Madame Speaker,

The Public Finance Management Act is an exemplary guideline for effective financial control and financial experts are lauding it, with by far the majority of its clauses being noted as practical and of great value for improved public finance administration. Nevertheless, it has certain shortcomings. In its implementation it is sometimes theoretical and is lacking in the proper sanctioning of civil servants who have indeed contravened provisions of the Act.

The acceptance and introduction of the P.F.M.A. was a major positive development in promoting fiscal discipline in South Africa. This moved the South African public sector from a basic cash recording system, to an accrual system, as prescribed by the general accepted accounting principles (G.A.A.P.) which is in accordance with the international norm. The P.F.M.A. read together with the treasury regulations, provide clear guidance for effective financial control, with definite sanctions for non-adherence to the Act and the regulations.

The National Treasury indicated in the "Inter-governmental Fiscal Review 2003", that although there has been a remarkable improvement in public financial management, there remains a challenge to bring all government departments and provinces to the same standard of budgeting, financial management and reporting.

The latter aspect - reporting on expenditure - is of vital importance for the Joint Budget Committee and Parliament to monitor monthly and quarterly expenditure published in terms of Section 32 of the PFMA.

The IFP agrees with the JBC that, although Section 32 reports are important, they contain limited information. This affects ongoing monitoring by Parliament of the expenditure trends in government spending.

The IFP therefore supported the committee's initiative to request Treasury to review the format and frequency of the Section 32 reports to enable Parliament to conduct ongoing monitoring, rather than monitoring at only a few selected points in time which did not paint an accurate enough picture of government performance.

The outcome of the joint workshop is the introduction of the quarterly National Programme and Economic Classification Report which we support. This report will give Parliament the ability to closely look at expenditure and to tract performance while acting as an early warning system to alert the public to problems with expenditure and service delivery.

The revision of Section 32 reports will enable the JBC to play its appointed oversight role much more effectively and will allow it to report to Parliament in a manner that will give effect to its mandate. The IFP supports increasing the committee's capacity and effectiveness that this move should achieve.

The rest of Parliament, in other words the various committees, should also derive benefit from the new reports enabling them to also improve their oversight role. This should not detract from the JBC's mandate but will enhance Parliament's overall effectiveness as an overseer of the Executive.

Thank you.