Financial Administration of Parliament and Provincial Legislatures Bill: briefing

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Finance Standing Committee

05 August 2004
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Meeting report

FINANCE SELECT COMMITTEE; FINANCE PORTFOLIO COMMITTEE: JOINT MEETING
6 August 2004
FINANCIAL ADMINISTRATION OF PARLIAMENT AND PROVINCIAL LEGISLATURES BILL: BRIEFING

Co-Chairpersons: Mr T Ralane and Dr Rob Davies

Document handed out
Draft Financial Administration of Parliament and Provincial Legislatures Bill

SUMMARY
Parts of the Bill are substantially similar to provisions of both the Municipal Finance Management Act (MFMA) and the Public Finance Management Act (PFMA). The Bill is necessary because the Constitution obliges Parliament to establish uniform treasury norms and standards for all spheres of government. The object of the Bill is to secure sound and sustainable management of the financial affairs of Parliament and provincial legislatures. It would apply to the administration of Parliament and the provincial legislatures, including committees and political office-bearers authorized to take decisions having financial implications for Parliament or a provincial legislature.

MINUTES
Mr Anton Meyer briefed the Committees on the Bill. Dr Eshaam Palmer accompanied him.

Mr Meyer said that parts of the Bill are substantially similar to provisions of both the Municipal Finance Management Act (MFMA) and the Public Finance Management Act (PFMA). The Bill is necessary because the Constitution obliges Parliament to establish uniform treasury norms and standards for all spheres of government. Such norms and standards are already in place for the national and local governments in the form of the PFMA and the MFMA. Although there are some references to Parliament in the PFMA, the institution is excluded from major parts of the Act. It is also unclear as to what extent the Act applies to Parliament.

Chapter 1
This chapter deals with definitions, object and application of the Bill. The object of the Bill is to secure sound and sustainable management of the financial affairs of Parliament and provincial legislatures. The Bill would apply to the administration of Parliament and the provincial legislatures, including committees and political office-bearers authorized to take decisions having financial implications for Parliament or a provincial legislature.

Chapter 2 - Revenues of legislatures
Chapter 2 deals with revenues of legislatures. It allows the administration of a legislature to open and maintain a bank account in the name of the legislature. A legislature may, however, not open a bank account abroad or with an institution that is not registered as a bank in terms of the Banks Act.

Chapter 3 - Budgetary matters
This chapter has strong links with the PFMA. The most important thing in this chapter is the suggestion that the budgetary requirements of Parliament and provincial legislatures should be included in the national and provincial annual budgets. Another important issue is who should be the chief executive authority in Parliament or provincial legislatures. The definition of the executive authority is contained in clause 1 of the Bill.

Chapter 4 Accounting officers and other officials
This chapter is almost identical to provisions of the MFMA. It deals with the appointment of accounting officers and chief financial officers and their duties.

Chapter 5 Supply chain management
This chapter covers the procurement and disposal of goods and service by a legislature.

Chapter 6 Internal audit and audit committees
This covers the internal audit functions.

Chapter 7 Financial reporting and auditing
This chapter deals with annual reports, disclosures on investments and bank account and disclosures concerning officials. The accounting officer of a legislature must prepare and submit financial statements to the Auditor General who must audit all such statements.

Chapter 8 Regulations and instructions
The executive authority of a legislature is empowered to make regulations or issue instructions regarding a number of issues. The executive authorities of legislatures must endeavour to achieve uniformity when prescribing regulations for their respective administrations.

Chapter 9 Financial misconduct
The chapter outlines the different financial misconduct that could be committed by officials, disciplinary and criminal proceedings. It is inline with the PFMA.

Chapter 10 Miscellaneous
This chapter deals with the liability of functionaries exercising powers and functions in terms of the Bill.

Repeal of legislation
Section 31 of the Powers and Privileges of Parliament Act is repealed.

Discussion
Mr S Asiya (ANC) noted that chapter 4 requires the submission of monthly and mid-year reports. He asked why the Bill is silent on quarterly reports.

Mr Meyer replied that the Bill contains reference to quarterly reports.

Ms B Hogan indicated that clause 13 refers to the management of the legislature's budget preparation process. She asked the presenter to explore the notion of management. She felt that Parliament is different from a municipality. The notion of managing could be construed to mean different things. She felt that the meaning of "administration" in chapter 6 is also unclear.

Mr Meyer conceded that the use of the word "manage" in clause 13 is problematic. The idea is to have accountability.

Ms J Fubbs noted that the Bill clarifies conduct that could be construed as financial misconduct. She wondered why there is no mention of what should not be construed as such misconduct.

Mr Meyer replied that financial misconduct in terms of the Bill is equivalent to misconduct in terms of the Municipal Finance Management Act. The Bill should be read together with the relevant regulations and instructions relating to the duties of the accounting officers.

Mr Y Bhamjee commented that transparency and accountability of Members of Parliament and Legislatures should the clarified in the Bill.

Mr Meyer replied that one should distinguish between Parliament and members in their individual capacities. The Bill deals with Parliament and not individual members.

Ms Hogan expressed concern over the fact that no member of a legislature may be a member of an audit committee. Not all members of a legislature form part of the management of the legislature. Consequently it is important to look at having some of them being eligible to serve in the committee. The institution or person to whom the audit unit should report to should also be clarified.

The Committee agreed that they should invite members of various legislatures to come and make some input on the Bill.

The meeting was adjourned.


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