Service delivery, poverty reduction and economic development and sustainability depend
on the availability of money and the ability to use it effectively, which requires good financial
management. Financial management fulfils an important role in the public sector, because
without public funds to cover operational and capital costs, and without appropriate
personnel, no public institution can render effective services. This paper analyses factors
that affect the effectiveness of public financial management in South Africa.
Many factors hinder public financial management and accountability, including the
high turnover rate of accounting officers and of parliamentary committees such as the
Standing Committee on Public Accounts (SCOPA), and a lack of political will. Although
South Africa has suitable oversight bodies, policies, procedures and Acts, the poor state
of financial management in South African government departments is demonstrated by
the low number of clean qualified audits which show that the requirements of the Public
Finance Management Act, Act 1 of 1999, the legislative oversight bodies, and the wider
legal framework governing public finances have been flouted. If financial management
in the public service is not addressed holistically, it may hamper, rather than assist,
government departments in their service delivery programmes.