Abstract:
After the transition to a fully democratic order in 1994, the adoption of
the new Constitution of the Republic of South Africa in 1996 prompted
the creation and development of a decentralised administrative structure
consisting of three distinct, but interrelated and interdependent spheres of
government (national, provincial and local government). It also lead to the
institution of a long-term budget reform initiative aimed at realising the
constitutional ideals of efficiency, effectiveness, equity and development
orientation. Significant budgets and expenditure responsibilities were
devolved to the provincial governments, which deliver crucial public
services such as providing basic education, supplying health services
and building and maintaining roads. Provincial treasuries play a crucial
role in driving the budget reform process in the subnational spheres, but
most budget reform research to date has focused virtually exclusively on
the role of the National Treasury. To fill this research void, this article
explores the role of provincial treasuries as a critical institutional modality
for implementing public financial management reforms in a decentralised fiscal setting. The article reviews the legislative framework for budget
reform and the mandate of provincial treasuries as derived from the Public
Finance Management Act, 1 of 1999. It assesses the recent performance
of provincial treasuries in driving budget reform in the provincial sphere,
using national intervention in the Limpopo Provincial Treasury in 2012 as a case study. The article concludes that the large variation in provincial
treasury performance and capacity poses a serious risk to the realisation
of public financial management reform benefits in South Africa.
