SCOPA BRIEFING

The Mandate, role and functions of the National Treasury

and Provincial Treasuries

Presenter: Michael Sass | Accountant-General, SA | 19 August 2014

AGENDA

• PFMA powers of the National Treasury;

• National Treasury actions required to implement the PFMA;

• MFMA powers of the National Treasury;

• National Treasury actions required to implement the PFMA;

• Purpose and functions of the Office of the Accountant – General (OAG);

• Business units within the OAG responsible for PFMA and MFMA related

activities; and

• Support to stakeholders

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PFMA POWERS OF

THE NATIONAL TREASURY

• Promote national government’s fiscal policy framework and co-ordinate

macro-economic policy;

• Co-ordinate inter-governmental financial and fiscal arrangements;

• Manage the budget preparation process;

• Exercise control over implementation of the national budget;

• Facilitate implementation of the annual Division of Revenue Act;

• Monitor implementation of provincial budgets

• Promote & enforce transparency & effective management of REAL; and

• Perform the functions of the National Treasury in terms of the PFMA.

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NATIONAL TREASURY ACTIONS REQUIRED

TO IMPLEMENT THE PFMA

• Prescribe uniform treasury norms and standards;

• Enforce the PFMA and GRAP in national departments;

• Monitor and assess implementation of the PFMA’

• Assist to build capacity for effective and efficient financial management;

• Investigate any system of financial management and internal control;

• Intervene by taking appropriate steps which may include invoking section

100 of the Constitution; and

• Do anything further that is necessary to fulfil its responsibilities.

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MFMA POWERS OF

THE NATIONAL TREASURY

• Fulfil responsibilities in terms of Chapter 13 of the Constitution, 1996;

• Promote objectives of the MFMA:-

within the framework of cooperative government (Chapter 2 of

Constitution); and

when co-ordinating inter-governmental financial and fiscal relations.

• Enforce compliance with measures established in terms of section 216(1)

of the Constitution and those contained in the MFMA.

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NATIONAL TREASURY ACTIONS REQUIRED

TO IMPLEMENT THE MFMA

• Monitor the budgets of municipalities;

• Promote good budget and fiscal management by municipalities;

• Monitor and assess MFMA compliance in municipalities;

• Investigate any system of financial management and internal control;

• Take appropriate steps if a municipality commits a breach of this Act; and

• Provincial treasuries must monitor:-

MFMA compliance in municipalities in their respective provinces;

Budget preparation of municipalities;

Monthly outcome of budgets;

Submission of reports required in terms of the MFMA.

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OFFICE OF THE ACCOUNTANT-GENERAL

Purpose

• To facilitate accountability, governance and oversight in the public sector

by promoting the effective, efficient, economical and transparent

management of REAL in the SA public sector

Functions

• Technical Support Services;

• Accounting Support and Reporting;

• Internal Audit and Risk Management Support;

• Specialised Audit Services;

• Governance Monitoring and Compliance;

• MFMA Implementation; and

• Capacity Building

TECHNICAL SUPPORT SERVICES

Purpose

• To develop policies, guidelines and frameworks on matters related to

accounting, internal audit and risk management

Functions

• Develop public sector financial reporting requirements;

• Participate in the IPSAS Board for the development of local and

international public sector accounting standards;

• Development of accounting, internal audit and risk management related

frameworks, policies and guidelines for the public sector;

• Develop strategies to migrate from cash to accrual accounting; and

• Contribute towards the development of a chart of accounts for PFMA and

MFMA compliant institutions.

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ACCOUNTING SUPPORT & REPORTING

Purpose

• To provide accounting & reporting support to PFMA and MFMA compliant

institutions; manage and report on the NRF and the RDP Fund.

Functions

• Provide accounting support to PFMA and MFMA compliant institutions;

• Contribute towards the development of policies, guidelines & frameworks;

• Guide implementation of accounting policies, guidelines and frameworks;

• Assist institutions to resolve audit outcomes (accounting related matters);

• Manage and report on the NRF and the RDP Fund;

• Prepare and publish monthly reports on the state of the budget; and

• Prepare annual consolidated financial statements (ACFS); and

• Provide consolidation guidance to provincial treasuries.

INTERNAL AUDIT (IA) SUPPORT

Purpose

• To provide IA support to all PFMA and MFMA compliant institutions

Functions

• Contribute towards the development of policies, guidelines & frameworks

• Guide the implementation of all IA policies, guidelines and frameworks;

• Assist institutions to resolve audit outcomes (IA related matters);

• Provide technical IA support to all institutions;

• Facilitate implementation of local and international IA best practices;

• Facilitate Quality Assurance Reviews in institutions; and

• Facilitate knowledge sharing initiatives through fora and workshops.

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RISK MANAGEMENT (RM) SUPPORT

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Purpose

• To provide RM support to PFMA and MFMA compliant institutions

Functions

• Contribute towards development of policies, guidelines & frameworks;

• Guide implementation of policies, guidelines an frameworks;

• Provide technical RM support to institutions;

• Assist institutions to resolve audit outcomes (RM related);

• Facilitate implementation of local and international RM best practices;

• Facilitate knowledge sharing initiatives through fora & workshops; and

• Provide fraud prevention support to institutions.

SPECIALISED AUDIT SERVICES

Purpose

• To provide financial management investigative capacity to public sector

institutions in all 3 spheres of government.

Functions

• Intervene to rectify the breakdown of financial management in PFMA and

MFMA compliant institutions;

• Investigate incidences of fraud & corruption in institutions;

• Liaison with investigative organs of state (Hawks and SAPS);

• Provide assurance on systems of FM and institutional integrity;

• Provide specialised FM training to investigative organs to assist with their

public sector investigations; and

• Serving as expert witnesses during the prosecution of persons charged

with fraud and corruption.

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GOVERNANCE MONITORING AND

COMPLIANCE (PFMA)

Purpose

• Monitor financial management governance and compliance with

legislation in PFMA compliant institutions.

Functions

• Maintain the PFMA and Regulations and the issuing of Instructions;

• Co-ordinate implementation of the PFMA in all institutions;

• Provide guidance on the interpretation and application of the Act;

• Regular monitoring of financial management and the annual submission

of progress reports to SCOPA & the Portfolio Committee on Finance;

• Analysis of audit outcomes and reporting thereof to Cabinet;

• Development of misc. guidelines to assist with PFMA implementation;

• Represent the National Treasury at OECD anti-corruption activities; and

• Provide miscellaneous PFMA support to provincial treasuries.

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MFMA IMPLEMENTATION

Purpose

• Monitor financial management governance and compliance with

legislation in MFMA compliant institutions.

Functions

• Maintain the MFMA, including the issuing of Regulations and Circulars;

• Monitor implementation of the MFMA in all municipal institutions;

• Provide guidance on interpretation and application of the MFMA;

• Assessing the financial maturity of municipal institutions using the

Financial Management Capability Maturity Model (FMCMM);

• Provide templates and related guidance to municipalities on the

development of their delegations of authority; and

• Provide a Municipal Finance Recovery Service (MFRS) for municipalities

experiencing financial management problems.

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CAPACITY BUILDING

Purpose

• To implement the public sector Capacity Building Strategy.

Functions

• Identify FM training needs for the public sector;

• Coordinate the development of FM training material with the NSG;

• Develop occupational profiles and training dictionaries for FM personnel;

• Implement interventions to address identified training needs;

• Develop Standard Operating Procedures for departments;

• Manage the National Treasury’s TOPP programme; and

• Manage the Financial Management Improvement Programme.

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Special

Audit

Services

Risk

Management

Support

Accounting

Support &

Reporting

Internal

Audit

Support

FMIP

Governance

Capacity

Building

Accounting Support,

implementation of

frameworks and

consolidation of FS

OAG

Development of

frameworks, policies

guidelines &

templates

Financial

Management

Capability

Maturity

Model

Risk Management

Support &

implementation of

frameworks

Internal Audit

Support &

implementation of

frameworks

Supply

Chain

Compliance

Unit

Technical

Support

Services

Monitoring FM governance and

compliance with legislation

PFMA & MFMA

SUPPORT TO STAKEHOLDERS

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ROLES OF SCOPA

(Protector of the Public Purse)

Specific focus should be placed on:

• General Report of the Auditor-General

• Matters raised in the individual audit reports of departments

• Compliance with Laws and Regulations (including PFMA &TR)

• Interrogation of instances of unauthorised expenditure, irregular

expenditure and fruitless and wasteful expenditure

• Functioning of transversal systems and financial, risk and personnel

management systems

• Supply chain management and contract management

• Major financial losses suffered by government

• Corporate governance and Ethics

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ROLES OF SCOPA

(Protector of the Public Purse)

Specific focus should be placed on:

• Issues of financial probity (e.g. fraud and corruption)

• Disposal of significant state assets

• Tenders of national importance

• Condonation of irregular expenditure

• Consolidated financial statements of government

• Information sharing with other committees

THANK YOU

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