Abstract:
In South Africa, the Public Finance Management Act, 1999 (Act No. 1 of 1999) is a piece of
legislation that is flexible and adaptable compared to the repealed Exchequer Act (Act No. 66
of 1975), which was prescriptive and rule driven. The administration of finance in the public
sector involves numerous challenges such as the lack of adequate capacity, integrity of
personnel and unqualified personnel. Solutions are sought simultaneously for prospects to
achieve value for money through economy, efficiency and effectiveness. Those who manage
public affairs and public finance are subject to public scrutiny. Transparency, accountability
and honesty as well as prudence in the management and administration of public finance are
imperative.
The problem statement is divided into the following research questions:
What is the PFMA (Public Finance Management Act) and how is it administered? How is the
PFMA administered in the North West Provincial Administration? In order to research the
above-mentioned problem and sub-problem, the following objectives were formulated: Determine from the literature the nature and scope of the PFMA and its administration;
establish the reason for the introduction of PFMA in South Africa; and determine the
administration of the PFMA in the North West provincial administration.
In implementing policy, the following elements were considered: The availability of trained
personnel, administrative arrangements to implement policy, material resources required for
proper implementation, procedures and directives for effective implementation, role of auditing
staff, and both internal and external, role of independent institutions such as the Public Service
Commission, Provincial Public Accounts Committee and the Auditor-General (AG).
The managerial control and fiduciary duties by the structures in government departments will
have to be enhanced in order to ensure that financial management is aligned with the PFMA.
Policy implementation requires the necessary tools, techniques, procedures, shared vision,
strategy, structure, systems, skills and staff. The study critically determines and establishes
various challenges experienced while managing finances through the administration of the
PFMA.
From the data gathered, analysis and interpretations were derived to arrive at the findings,
interpretations, inferences and recommendations. There is evidence of financial
qualifications in the audit opinion, shortcomings in various departments, capacity constraints,
and a lack of a clear trail of supporting documentation, ineffective leadership, supervision,
monitoring and support. Appropriate recommendations are provided to remedy the situation.
