Public Finance Management Act: Implementation Plan

Meeting report

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The aim of this report is to summarise the main events at the meeting and identify the key role players. This report is not a verbatim transcript of proceedings.

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE
22 May 2002
PUBLIC FINANCE MANAGEMENT ACT: IMPLEMENTATION PLAN

Chairperson: Ms B. P. Sonjica

Documents handed out:
PFMA Implementation Plan: Department of Water Affairs and Forestry
(This document is not yet electronically available).

Minutes
The Chief Financial Officer (CFO) of the Department of Water Affairs and Forestry, Mr John Mabala, briefed the Committee on the Public Finance Management Act (PFMA) Implementation Plan. The requirements of the PFMA were presented, and the progress that the department had made on its implementation was discussed.

Discussion
Ms B.P. Sonjica (ANC) started the discussion by stating that the PFMA requirements apply to all government departments and that its guidelines made everyone accountable for their actions.

Mr D.S. Maimane (ANC) said that it was clear that there were some challenges with the division of revenue, but asked what the department's strategies were to overt them.

Mr J. Mabala (DWAF) responded that there were difficulties transfering funds to local authorities, because they often did not have the capacity to make use of such funds. To prevent this, a time frame for the transfer of funds would be agreed upon, in which the local authorities would be given time to increase their capacity to handle such funding. Provinces who had the capacity to handle more money would receive an appropriate amount.

Mr G. McIntosh (DP) pointed out that the phasing in of section 27(4) was delayed and asked when it would be fully operational. He also recognized that there were serious consequences for non-compliance of sections 38-40 and wanted to know if the CFO felt secure when the accounting officer could face punishment.

Mr J. Mabala (DWAF) said that the act would be implemented in April 2003. With regards to the criminal proceedings of the Accounting Officer (AO), the CFO stated that he was happy that irregularities in the department would be dealt with. He admitted that there was not yet 100% compliance, but that it was very good and constantly improving.

Prof H. Ngubane (IFP) asked what would happen to the funding if the local authorities unable to spend it all.

Mr J. Mabala (DWAF) agreed that there was a problem with overspending and underspending. Unspent money can now be transferred to other programs, with the consent of the National Treasury, so that it does not go unspent.

Ms B.P. Sonjica (ANC) stated that 68% of the budget were allocated on a regional basis, but wondered how prepared they were to handle the money. She also asked if they were aware of the PFMA requirements.

Mr J. Mabala (DWAF) responded that the problems were mainly related to financial management. He said that training was taking place on regional level. Regular checks were also done to make sure that their capacity was improving. He was unsure whether all functions could be decentralized, but noted that some responsibilities have already been delegated. He believed that it was important that the department did not decentralize to the extent that there could no longer be a system of checks.

Ms R. Ndzanga (ANC) wanted to know how violators of the PFMA would be disciplined.

Mr J. Mabala (DWAF) responded that the manager would be told, the violator would be presented with his violation, a disciplinary hearing would be held, and a final report would go to the director general.

Mr M.M. Masala (ANC) asked the CFO to re-explain the system of evaluation for major projects.

Mr J. Mabala (DWAF) reiterated that the evaluation process would target how the community would benefit, what budget would be necessary to successfully implement the plan, what resources would be needed, what would be achieved, and how long it would take to complete.

Ms B.P. Sonjica (ANC) inquired about the corruption in the TCTA and its consequences.

Mr J. Mabala (DWAF) replied that the TCTA was a major public entity, which was part of government, and answerable to the Minister of Water and Forestry. He noted that any corruption that took place in the TCTA should be reported to the Minister.

Ms B.P. Sonjica (ANC) concluded by saying that there was a problem with corruption and embezzling of funds in the construction of dams, and that the issue would be discussed at the World Summit on Sustainable Development in Johannesburg.

The meeting was adjourned.

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