15 May 2007
Introduction
Madam Speaker, it is that time of the year again when we reflect on our
achievements for the past year and put forward our strategies and programmes
for achieving the objectives of the department in the new year. As a back
office department, the Provincial Treasury can be compared to the engine room
of a factory. The actual production happens on the factory floor, but without a
properly functioning engine room, no production can take place on the factory
floor. This fact is not always evident to the clients of the business. That is
why, on behalf of the management and staff of the Department of Finance, I
would like to take this opportunity to thank the honourable Premier, Mrs
Molewa, for awarding the Department of Finance the prestigious Platinum
Excellence Award by going behind the factory floor to appreciate the work of
the engine room staff.
It was the great Greek philosopher, Aristotle, who once said, "Excellence is
not an act, it is a habit." In this vein, I want to assure the honourable
Premier and the people of the North West province that the Department of
Finance will not rest on its laurels but will continue to support the
provincial administration in ensuring that the financial resources of the
province are utilised for the benefit of our people.
Highlights of the previous year
Madam Speaker, before I elaborate on the objectives and programmes of the
department for the 2007/08 financial year, allow me to highlight some of the
achievements of the department in the previous year. The implementation of
learnerships has successfully taken off. Currently two learnerships are
running, with 10 learners in the Public Sector Accounting Programme in the
Accountant General's Division and 18 learners in the Internal Audit Technician
Programme for Provincial Internal Audit. The Employee Wellness programmes have
been beefed up with a fully functional clinic that attended to 824 employees
and treated 301 ailments with 79 referrals to doctors and/or hospitals in the
previous financial year.
The Department also contributed directly to poverty alleviation by
collecting donations during our Candle Light Memorial Service and used the
proceeds to assist the Bodibe Hospice with utensils and groceries and by
donating bedding, utensils and groceries to the staff at Verdwaal Hospice where
through a co-ordinated outreach programme, we also cleaned the premises and
started a vegetable garden. Prepared a credible and balanced provincial budget
in spite of the North West province losing more than R2 billion per annum in
equitable share resulting from the disestablishment of the cross-boundary
municipalities.
Several roadshows were conducted around the province to educate the public
about the new tendering processes. The bid for Phase 2 of the financial
management training programme focusing on non financial managers was finalised
and implementation commenced in April 2007. The Provincial Internal Audit
passed the external quality assessment conducted by the Institute of Internal
Auditors in terms of the Treasury Regulations. The North West Provincial
Internal Audit was the only provincial internal audit function to pass this
assessment. For the first time, the Auditor-General came to the conclusion
after reviewing the internal audit activity that they would rely on the work of
Provincial Internal Audit for the 2006/07 audit of provincial departments.
Conducted district Chief Financial Officers forum meetings to assess the
challenges regarding the preparation of the 2007/08 budgets and the readiness
with regard to Generally Recognised Accounting Practice (GRAP) and Generally
Accepted Municipal Accounting Policies (GAMAP) conversion. The Municipal
Finance Management Act (MFMA) media learning programme has shown an increase in
learners from 162 to 242. We conducted an assessment of the Supply Chain
Management (SCM) implementation plans at Ratlou, Ventersdorp, Kgetleng Rivier
and Ramotshere Moiloa municipalities. The Provincial Geographic Information
System central repository architecture was set up, resulting in economies of
scale for the North West Provincial Administration and reducing duplication and
data redundancy. The Provincial Project Management central repository
architecture was also set up. Provincial departments are now able to manage all
their projects, via the Internet in real time across the province and the
country. The system will later be interfaced to ProMis (a project management
reporting tool).
Strategic focus for 2007/08
Madam Speaker, it is against this background of achievements in our pursuit
of establishing and maintaining a sound financial management system and good
corporate governance in the North West Provincial Administration, that I
present an overview of the strategic focus of the programmes of the department
for the 2007/08 financial year. Assuming the responsibility of being the
catalyst for change as far as provincial financial matters are concerned and
arising from the Provincial Treasury's vision and mission, the department will
focus primarily on the following in the 2007/08 financial year:
* improving budget planning and management by aligning its strategic
objectives and proposed allocations to derive the desired outcomes
* implementing proper asset management by further developing and enhancing the
different stages of the supply chain management process, moveable and fixed
assets control, provincial public private partnerships, cash management and
financial systems management
* managing liabilities by improving debtor management practices, creditor
turnaround times, dealing with budget pressures and contingencies
* establishing full accounting compliance by producing consolidated financial
statements and promoting substantive accrual based accounting standards and
practices
* maintaining fiscal discipline by promoting efficient spending
* building capacity by effective recruitment processes within Treasury and
through financial training for all financial management staff in the
province
* establishing structures and procedures to ensure a seamless integration
between the provincial and local government spheres pertaining mainly to the
implementation of the MFMA
* maintaining financial governance by setting norms and standards
* expanding our internal audit services to include the audit of performance
information and risk management.
The Budget for 2007/08
Madam Speaker, I now present the departmental budget for the 2007/08
financial year. The total budget for the department for the 2007/08 financial
year is R262 546 million which shows an increase of 7% over the allocation for
the previous year. The budget allocations for the two outer years of the medium
term expenditure framework (MTEF), period are R265 873 million and R278 917
million, respectively. The allocation of the budget to the six main programmes
is as follows:
Administration
The objective of this programme is to provide administrative leadership,
human resource and communication support services to the department and to
build working relations with stakeholders. In the coming year the programme
will develop strategies to enhance cohesion and shared corporate culture,
maintain the performance management and development system, implement the
Provincial Communications Policy Framework, develop a framework and policy for
internal security and implement transformation initiatives such as the
learnership programme and the employee wellness programmes. The Programme is
allocated R36 823 million in the 2007/08 financial year and R38.600 million and
R40 483 million respectively in the two outer years of the MTEF period.
Sustainable Resource Management
The Sustainable Resources Development is responsible for the development of
policy guidelines and ensuring effective implementation of Public Finance
Management Act (PFMA), consolidation and monitoring of the provincial budget
and providing effective and efficient control over provincial revenue and other
resources. In the coming year the programme will establish a new sub-programme
to be called economic analysis in line with the framework and guidance from the
National Treasury. In addition, the programme will continue to administer the
medium term revenue planning process, consolidate provincial budgets in terms
of the PFMA, sustain good financial governance in the province through proper
integration of planning and budgeting, monitor expenditure and revenue
implementation of infrastructure projects and conditional grants and report
thereon to National Treasury. The Programme is allocated R35 892 million for
the 2007/08 financial year and R37 310 million and R38 812 million respectively
for the two outer years of the MTEF period.
Asset and Liabilities Management
The role of this programme is to manage provincial assets and liabilities
and to provide policy guidelines on supply chain management. In the 2007/08
financial year the programme will devote attention to monitoring the
acquisition, maintenance and disposal of state assets by ensuring compliance
with policies, rules and regulations, facilitating Public Private Partnerships
by providing leadership and technical support to provincial departments;
training departmental officials in supply chain management to ensure compliance
with policies, legislation and best practices and implementation of an
integrated electronic tendering and quotation system. The budget allocation for
this programme for the 2007/08 financial year is R12 316 million. The
allocations for the 2008/09 and 2009/2010 financial years are R12 024 million
and R11 549 million respectively.
Financial Governance
The Financial Governance Programme is the composite programme for the
Provincial Accountant General's Office and the Provincial Internal Audit. The
Accountant General's Office is responsible for financial management and
accounting services for the province whilst Provincial Internal Audit provides
transversal internal audit services to ten out of the eleven provincial
departments.
In the coming year the Accountant General's Office will continue to work
together with the Chief Financial Officers (CFOs) of provincial departments to
put proper financial and internal control systems in place to ensure a higher
percentage of unqualified audit reports for provincial departments; establish
financial norms and standards to facilitate the transition to accrual
accounting; provide training in financial management and capacity building in
the CFO's offices and maintain a well functioning supplier payment system.
The Provincial Internal Audit will continue to build on the good foundation
laid by expanding the focus of audit coverage, especially in performance and IT
auditing, assist departments in the implementation of risk management systems
as required by the Treasury Regulations and train staff to address the general
shortage of qualified internal auditors in the country. In this regard it will
establish a second group of learners in the Internal Audit Technician
programme. An amount of R83 544 million has been allocated for this programme
for the 2007/08 financial year. The budget allocations for the two outer years
of the MTEF period are R87 426 million and R91 807 million respectively.
Municipal Financial Management
The primary objective of this programme is to assist municipalities in
modernising their budgeting and financial management practices in order to
maximise their capacity to deliver services to all residents, customers, users
and investors. It also aims at putting in place a sound financial governance
framework in all the municipalities. This programme is now fully established
and is better positioned to assist municipalities in the roll out of the
Municipal Finance Management Act. In the coming year it will:
* conduct a comprehensive Status Quo Assessment of all municipalities, in
order to develop tailor-made monitoring and support programmes for each
municipality
* provide hands on support to municipalities in the compilation of their
2007/08 operating and capital budgets, to ensure effective service delivery and
sound financial management
* provide dedicated support to medium and low capacity municipalities to ensure
the proper implementation of the GRAP and the GAMAP
* provide dedicated and focused training and capacity building programmes for
municipal officials and councillors. The focus will be on the job training and
skills development
* develop and maintain effective financial management systems to reduce the
number of qualified audit reports.
The budget allocation for the 2007/08 financial year is R10 711 million and
R13 138 million and R13 542 million in the two outer years of the MTEF period
respectively.
Information Technology
The key responsibility of this programme is to offer information technology
strategic direction in the North West Provincial Administration by providing
information technology solutions. These include development and maintenance of
enterprise applications, management and support of network services and
architecture, database and data storage, information and communication
technology (ICT) security, mainframe and server systems and provision of
E-government services.
In the coming year, this Programme will ensure that ICT investments are in
alignment with the Provincial Master Systems Plan, establish User Groups for
Core Products, identify North West Provincial Administration's outsourcing
needs and negotiate and measure vendors contractual performances in support of
government's service delivery, develop and implement software solution in
support of the information needs of the provincial administration, ensure the
confidentiality, integrity and availability of government information assets,
ensure that the network architecture has the capabilities to sustain current
and future volume of data and applications in the provincial administration,
ensure sufficient storage capacity is maintained for current and future data
and applications, develop and implement user training programmes for products
and services provided by Central IT and create an internal environment that
facilitates an open system of communication within the directorate.
The budget allocation for this division for carrying out its programmes is
R83 260 million for the 2007/08 financial year. The corresponding allocations
for the two outer years of the MTEF period are R77 375 million and R82 724
million respectively.
Conclusion
Madam Speaker, before I conclude permit me to acknowledge the contribution
of the Chairperson of the Provincial Audit Committee to the growth and
development of the internal audit function in the province. Mr Jeff van Rooyen
has been the chairperson of the Provincial Audit Committee since its inception
in 2001. He served the Committee with dedication and without asking for any
remuneration for 6 years. Mr. van Rooyen tendered his resignation as the
chairperson and member of the Provincial Audit Committee in February this year
due to other international commitments. On behalf of the North West Provincial
Government I wish to express our gratitude to Mr van Rooyen and his committee
for excellent work done.
Finally, allow me to thank and pay special tribute to Mr Geo Paul, senior
managers and the entire staff affectionately called "Team Finance", by stealing
a leaf from Sir Harry Lander's story he used to tell of the street Lamp Lighter
in the village where he grew up. This was the period before the advent of
electricity. The old man would make his rounds with a ladder and his lighter.
He would put the ladder against the post, climb up and light the lamp, climb
down again and move to the next lamp. He would repeat this procedure, lamp post
after lamp post the entire street.
After a while he would be out of sight, so you couldn't see him anymore but
you could always see which way he had gone from the lamps he had lit. What is
the moral of this story?
I believe that this is the greatest tribute that any of us can receive from
our fellow citizens. Mr Geo Paul, senior managers and staff of the Department
of Finance, it is my earnest hope that some of the work that we have done as a
collective during the past 20 months will light a lamp in your hearts, but more
important, that as you walk down the road of life, people will follow your
course in the light of the lamps that you will have left for them, to
follow.
Ke a leboga.
Ngiyabonga.
Baie dankie.
I thank you.
Issued by: Department of Finance, North West Provincial Government
15 May 2007
Source: North West Provincial Government (http://www.nwpg.gov.za)
