Abstract:
Since the transition to democracy in 1994, the South African government has engaged
in a sustained programme of public financial management (PFM) reform across the
national, provincial and local spheres of government. This study evaluates the progress
of the nine provincial education departments (PEDs) in implementing the Public
Finance Management Act of 1999, and explores the factors which facilitated or impeded
reform. A public financial management progress (PFMP) index is constructed to track
each PED‘s performance from 1997/98 to 2013/14 and then used to benchmark its
progress over time and relative to the education sector as a whole. The indicators
comprising the PFMP index assess key PFM functions (budgeting, accounting, financial
auditing and audits of performance information), financial leadership and the
effectiveness of governance institutions such as audit committees. While there has been
considerable progress in PFM, distinct differences in the quality and effectiveness of
PFM practices across the nine PEDs remain. Stable top administrative leadership,
availability of PFM skills, varying degrees of accountability and departmental capacity to establish PFM systems that conform to new accounting standards drive variances in
reform outcomes.
