PROGRESS REPORT ON IMPLEMENTATION OF THE PUBLIC FINANCE MANAGEMENT ACT Freeman Nomvalo Accountant-General 29 August 2007 National Treasury

CONTENT Introduction Internal Audit & Audit Committees Risk Management Internal Controls Asset Management Supply Chain Management Performance Information Other PFMA related initiatives Actual Expenditure for 2006/2007 Conclusion

INTRODUCTION Implementation of PFMA contributed towards enhancement of financial management and accountability Ongoing PFMA monitoring processes and assessment of audit reports of Auditor-General Certain disciplines of financial management still pose challenges

INTERNAL AUDIT FUNCTION Survey conducted on the functioning of internal audit activities Several vacancies still exist within internal audit units Position of chief audit executive not at appropriate level Hosted the third public sector internal audit indaba External service provider appointed to conduct quality assurance reviews

RISK MANAGEMENT Risk Management tool rolled out from August 2006 has been enhanced. Risk Management training to various public sector officials Risk Management forum established proves to be successful in generating interest Hosted a risk management symposium for all three spheres of government

INTERNAL CONTROLS Proper and effective internal controls are critical for management to meet PFMA requirements Progress with finalisation of internal control framework slower than expected. Outcomes of 2006/2007 audit process will be used to update the framework Further enhancement of the capability model in accordance with the South African public sector environment

ASSET MANAGEMENT Departmental asset management plans developed and implemented since 2005/2006 Ongoing engagement with departments to address and resolve problems High turnover of experienced and trained asset management personnel Reconciliation between asset registers and financial reports remain a problem Provide for additional reports and information on existing systems

SUPPLY CHAIN MANAGEMENT Ongoing engagement with all organs of state regarding implementation of supply chain management reforms All non-transversal contracts devolved to accounting officers In process to align Preferential Procurement Policy Framework Act with the Broad-based Black Economic Empowerment Act Progress with implementation of strategic sourcing

PERFORMANCE INFORMATION Framework for managing performance information Improved accountability and transparency through timely, accessible and accurate information Facilitate easy auditing of performance information by auditors Identify performance indicators for tracking service delivery against pre-determined indicators Guides and training manuals to support implementation of framework

OTHER PFMA RELATED INITIATIVES Integrated financial management system Implementation of generally recognised accounting practice Early warning report Monthly management reports Provincial budget preparation and implementation Financial distribution and capital asset policies Training outside public practice (TOPP) programme

ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR FROM NATIONAL REVENUE FUND 1) 1) Unaudited figures

ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR FROM NATIONAL REVENUE FUND

ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR FROM NATIONAL REVENUE FUND

ACTUAL EXPENDITURE FOR 2006/2007 FINANCIAL YEAR FROM NATIONAL REVENUE FUND

CONCLUSION Initiatives are consistent with National Treasury’s responsibilities i.t.o. section 6(2)(d) of the PFMA Committed to exercise its enforcement and oversight responsibilities Accounting Officers / Authorities remain the main role-players to promote and ensure effective financial management within their institutions