The Department of Finance has a responsibility to assist the departments, municipalities and public entities to implement and ensure compliance with the Public Finance Management Act and all related policies and regulations.
This responsibility includes amongst others, providing hands–on support and capacity building on financial accounting and governance, where needed.
In performing this function, the department is guided by the reports and findings of the Auditor-General and the Audit Committees, which form the basis for support that is provided to enable efficient management of financial resources in the province.
The department is continuously implementing measures to address the financial governance matters as reported in the annual reports of the departments and three provincial public entities.
During the 2010/11 financial year, the department implemented the Financial Management Capability Maturity Model (FMCMM) for the provincial departments and public entities.
The model is used to determine the financial maturity level of the departments and provides the basis for monitoring of compliance with financial and non-financial norms and standards in the province.
This model is a critical governance improvement tool which is being used to determine whether we are moving towards clean and accountable service delivery and at what pace.
We are continuously engaging departments and public entities to develop and implement action plans to close the gaps in financial management processes that are or may be identified after assessing the reports emanating from application of the model.
The province has also established an Audit Committee Forum, consisting of Chairpersons of Audit Committees which serves as a platform for discussion and consolidation of governance improvement mechanisms in the province.
We have, in addition to these interventions, appointed municipal finance specialists to provide a dedicated technical support on financial management in the local government sphere.
The transversal nature of the mandate of this department means that we are expected to ensure that the financial governance systems do not fail this administration.
We are working very hard to ensure that the values of accountability and transparency are infused in everything that we do as the provincial administration.
Accordingly, and in compliance with section 19 of the Public Finance Management Act (Act 1 of 1999) the department submitted Consolidated Annual Financial Statements for the provincial departments, public entities, the provincial legislature and the provincial revenue fund for the financial year of 2010/11 to the legislature last week.
The report is prepared on the basis of an aggregation and is presented as consolidated financial information in order to give a holistic view of the financial performance and position of the province for this period.
The official and audited financial information does not corroborate the claims of “whopping loss of R2.9 billion to fruitless, wasteful, irregular and unauthorised expenditure, as well as through negligence and accruals during the 2010 – 11 financial year”.
This figure is based on wrong interpretation of the Public Finance Management Act and the available financial information for the year under review.
We are however looking at the claim in order to improve on the work that is being done to ensure effective and efficient financial management and governance.
We are more encouraged by visible improvement in the audit outcomes of the provincial departments since 2008/9 financial year.
The provincial consolidated financial information report for the year ended 31 March 2011 indicates the following improvements:
- decrease in qualified opinions from two in 2009/10 to one in 2010/11;
- decrease in number of departments with “other emphasis” from ten to nine in 2010/11, and
- increase in number of departments with “no emphasis “from one in 2009/10 to three in 2010/11.
The provincial government will continue to implement measures to assist the public institutions to achieve clean audit outcomes by 2014.
For more information contact:
Letshela Jonas
Tel: 013 766 4323
Cell: 079 5000 154
