Public Finance Management Act: workshop

Meeting report

EDUCATION PORTFOLIO COMMITTEE
17 August 2004
PUBLIC FINANCE MANAGEMENT ACT: WORKSHOP

Chairperson: Professor S Mayatula (ANC).

Documents handed out:
Public Finance Management Act 1 of 1999
Department presentation on the Act and Legislative oversight of Annual Reports.

SUMMARY:
The National Treasury presented a workshop briefing on the Public Finance Management Act (PMFA) and the procedures relating to legislative oversight of Annual Reports. The Committee agreed that the Finance Department should be recalled in order to provide Members' with more precise information on how the PMFA impacted on the Committee's oversight activities. The meeting of the Education Programming Sub-Committee was also rescheduled for 25 August.

MINUTES:
Mr N Du Plessis (Treasury Chief Director: PFMA Implementation Unit) briefed the Committee on the PFMA and the practices and procedures relating to legislative oversight of Annual Reports. He explained how the PFMA focused on accountability, not only in terms of monitoring expenditure, but also the results achieved. He said that Annual Reports were also key instruments in the accountability process and that the proper evaluation of such reports would improve service delivery. The Treasury was preparing a Guideline Document for Members on issues of oversight.

Discussion:
The Chairperson commented that parts of the presentation were too 'busy' and that Members required more precise information.

Ms P Mnandi (ANC) agreed that the presentation was not of a high standard. She requested clarity on what was meant by a 'participatory budget process' - ordinary people should be involved in budget planning. She then queried the monitoring of Provincial and Local Government expenditures and asked to whom Treasury was answerable.

Mr Du Plessis apologised for the broadness of the presentation but indicated that the Guideline document, which the Treasury would submit to the Speaker, would include details concerning the issue of legislative oversight. The Treasury had consulted extensively with relevant clients and stakeholders during the compilation of the budget. With regards to the monitoring of Provincial and Local Government expenditure, the PFMA implementation plan did allow for the establishment of an 'early-warning system' but that the quality of information received by the Treasury was a concern. The Portfolio Committee on Finance was responsible for overseeing the Treasury.

The Chairperson requested that the Treasury provide practical examples of the how the PFMA would affect the Education Portfolio. Due to the lack of information, the meeting of the Education Programming Sub-Committee could be rescheduled for 25 August. The Committee Programme should include a briefing on the Guideline manual.

Mr D Montsitsi (ANC) pointed out that certain public entities were not PFMA compliant, and asked whose responsibility it was to ensure that such entities conformed.

Mr Mthembo (ANC) inquired about the powers of the Treasury in terms of enforcing the PFMA, and asked how the Treasury could improve its monitoring of outcomes.

Mr Du Plessis responded that staff in the Budget Office dealing with the Education Department would be in a better position to provide practical examples of the effects of the PFMA. There was a problem with respect to certain public entities failing to submit the requisite documentation and the Treasury had taken steps to rectify this. Although outcomes were difficult to monitor, the Departments' performance evaluation system was improving.

Mr A Mpontshane (IFP) asked whether effective oversight was possible, considering that most Members were associated with the governing authority.

Mr Du Plessis replied that, in his experience, oversight of financial management issues had generally moved beyond Party lines.

Mr Montsitsi raised a query concerning the allocation of funds to Portfolio Committees.

Mr Du Plessis explained that the National Treasury provided Parliament with a set budget and was not involved with the allocation of funds to specific Committees.

The Chairperson requested that the Members be provided with more information so that the Committee could define its approach to oversight. He proposed that the Department of Finance be recalled to brief the Members on the Guideline document. He also inquired which documents the Committee ought to prioritise.

Mr Du Plessis stressed that it was important for the Members to obtain the 2003 Strategic Plans for the relevant departments so that the Committee could ascertain the progress of certain performance initiatives from the 2004 department reports.

The Chairperson accepted the recommendation that the meeting of the Education Programming Sub-Committee be postponed until 25 August and that the Department of Finance be recalled to brief the Committee on the Guideline document.

The meeting was adjourned.