Financial Management of Parliament Bill: deliberations

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Finance Standing Committee

15 September 2005
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Meeting report

FINANCE PORTFOLIO AND SELECT COMMITTEES: JOINT MEETING
16 September 2005
FINANCIAL MANAGEMENT OF PARLIAMENT BILL: DELIBERATIONS

Chairpersons

: Mr M Nene (ANC; NA); Mr T Ralane (ANC; NCOP)

Documents handed out:
 

Financial Management of Parliament Bill 2005: Draft Revised after 7 September 2005 meeting
Financial Management of Parliament Bill, 2005: Draft Revised after 13 September 2005 meeting

SUMMARY

 

The drafting team briefed the Committee on the latest proposed amendments to the Financial Management of Parliament Bill. Members raised issues on the clauses dealing with the strategic plan, the rolling over of unspent funds, the financial management of individual political parties and the Supply Chain Management Policy.

MINUTES

Financial Management of Parliament Bill

Mr T Ralane (ANC) asked the drafting team to take the Committee through the amendments to the Bill.

Chapter 1: Interpretation and Objects
Definitions
Mr Conrad Barberton (Consultant) said that a definition for unauthorised funds had been included to make the misuse of donor funds unauthorised. The Committee offered no comment.

Chapter 2: Authority and Administration of Act
Clause 3: Executive Authority
Ms B Hogan (ANC) asked where the code of conduct for civil servants fitted in to that clause. Mr Barberton replied that the code of conduct referred to in the clause was specifically for senior managers only but that there were overlaps between the different codes of conduct.

Chapter 3: Planning and BudgetingClause 12: Strategic Plan
Mr Barberton said that the strategic plan would have a five year duration. An annual performance plan would be produced each year and it would be a measure of the administration's performance.

Ms J Fubbs (ANC) asked if the projected budgets would still be tabled every three years. Mr Barberton replied that the three year budgeting process was still in place.

Mr I Davidson (DA) asked if there was scope for flexibility in the Bill which would allow changes to the strategic plan if the need arose. Mr Barberton replied that the strategic plan was dynamic and that Clause 12A (1) and 12A (2b) allowed for changes to the strategic plan on an annual basis if necessary.

Ms Hogan wanted a sub-clause to be included which would state that the Accounting Officer must submit the strategic plan not later than one year after the most recent general election.

Mr Y Bhamjee (ANC) asked what agency was responsible for the presentation of the strategic plan. Mr Barberton replied that the Executive Authority was responsible for this matter.

Mr Bhamjee said that the Executive Authority must be responsible for any failures in the delivery of the strategic plan. Mr Barberton replied that the Bill required the Executive Authority to account for the delivery of the strategic plan.

Ms Hogan stated that the Public Finance Management Act (PFMA) did not outline who was accountable for delivery failures. The responsible parties should appear before the Section 14(2) committee to explain its failures in the future.

Ms Hogan asked if there was a definition for the term ‘Parliament's administration’ as this was vague. Mr Paul Benjamin (Legal Consultant) replied that there was no definition in use. Mr Barberton added that the clause referred to the Bill's aim to improve the financial administration of Parliament as opposed to its legislative or political programme.

Mr Davidson stated that general administration issues did not necessarily pertain to the financial management of Parliament and that clarity was needed on this matter.

Ms Hogan said that she could not see how one could separate administration concerns from the core functions of any institution as various function would often overlap. Budgets must relate to the key performance functions of the institution and therefore a holistic budgetary approach was needed to encompass all matters which contributed to the effective management of Parliament.

Mr Barberton suggested the removal of the term ‘administration’ and the use of the term ‘Parliament’ only. The Committee agreed to this proposal.

Mr Bhamjee stated that each Portfolio Committee should submit individual strategic plans which would then be assessed and incorporated into an overall strategic plan. The impact of the strategic plan on the budgetary process should be clarified.

Clause 14: Submission of Strategic Plan, Annual Performance Plan and Budget
Ms Hogan commented that the clause gave the Executive Authority little time to consider the strategic plan and asked if the Executive Authority was isolated from the design phase of the strategic plan. She requested a rephrasing of the clause to stipulate the Executive Authority’s role in the process. Mr Benjamin replied that the Executive Authority was included in the design of the plan.

Ms Hogan asked if a joint committee would approve the strategic plan.

Mr K Moloto (ANC) pointed out that the draft Bill of 7 September 2005 had stated that the plan would be submitted for approval but that in the latest version of the Bill this had been excluded.

Mr Barberton explained that the exclusion of this provision was a mistake and that it was still relevant.

Mr Bhamjee said that the clause should stipulate a consultative arrangement between the Executive Authority and Accounting Officer. Mr Benjamin replied that the relationship would not be consultative as there was no requirement for consensus. The Executive Authority would have veto and over-riding powers. Mr Barberton suggested minor wording changes to compensate for the confusion. The Committee agreed to this proposal.

Clause 17: Unauthorised Expenditure
Ms Hogan suggested the wording of the clause be submitted to the Auditor-General in order to get their opinion on it.

Clause 19: Roll-Over of Unspent Funds
Mr N Van Dyk (DA) noted that the clause essentially meant that any unspent funds were rolled over and that the word ‘not’ should be deleted to clarify this. Mr Barberton replied that the funds would be rolled over through the budget process and not a separate process and thus the deletion of the word ‘not’ would be problematic.

Mr Bhamjee asked about the status of funds collected by provinces. Mr Barberton replied that the provincial funds would be treated in the same way as national revenue.

Ms Hogan suggested the clause also be referred to the Auditor-General and that a sub-clause should be included to state that the funds would be subject to roll-over approval following the budget process.

Clause 24: Withdrawals from Bank Accounts
Mr Moloto asked if there was any limit to the number of bank accounts that Parliament could hold. Ms Hogan replied that there was no limit.

Ms Nguni (IFP) asked if money that was incorrectly paid into a bank account and then refunded would be paid back with interest. Mr Barberton replied that this depended on the circumstances and that it was not possible to legislate to this end.

Clause 26: Requisitioning of Funds by Accounting Officer
The Committee approved the amendments to the clause.





Chapter 5: Financial Management
Clause 30A: Support for Political Parties
Mr Ralane said that the clause incorporated substantial information that needed to be absorbed by the Committee before it could comment on it. He suggested that time be given to the Committee to allow for discussion amongst party caucuses. Members were allowed to raise issues but these were not discussed as some Members had not been able to study the clause properly.

Mr Davidson asked what provisions had been made to allow changes to the expenditure plans of the political parties.

Mr Davidson stated that he was concerned that there was no mechanism to account for party expenditure and raised the issue of political parties that dissolved. He suggested that monthly financial reports for parties be tabled as opposed to annual reports.

Ms Hogan asked if there were restrictions on an individual party’s bank accounts as the central bank account proposed in the Bill was not operational in practice.

Mr Barberton raised the issue of procurement processes and asked who would own the assets of a political party that ceased to exist.

Ms Hogan raised concerns about conflict of interest issues and asked how the clause would impact on constitutional procurement processes. She asked what authority would follow-up on mismanagement once the financial reports of the parties had been tabled.

Ms Fubbs asked about the constitutionality of the proposed fine of one tenth of a party's constituency funds if a party submitted late financial statements.

Mr Bhamjee complained that the Committee was wasting time by raising issues that would not be debated and requested that the Chairperson introduce a clear structure to the meeting. Mr Moloto replied that any concerns that were raised would help to clarify issues for the Committee even if they were not debated openly.

Mr M Johnson (ANC) suggested that the drafting team consult with individual party caucuses in order to gauge opinions on the matter.

Chapter 6: Supply Chain Management
Mr Ralane stated that the Committee needed time to assess the implications of the Supply Chain Management clauses.

Mr Moloto said that he was content with Clause 39B but that the clause should widen its scope to include people ‘in the service of the state’.

Mr Bhamjee commented that the Supply Chain Management Policy was a work in progress and that this should be taken into account when the Committee deliberated on this.

Ms Nguni was concerned that the tender processes could encourage cronyism.

Mr Benjamin replied that there were complexities which needed attention.

The meeting was adjourned.

 

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