Introduction To PFMA | Public Finance Management Act Simplified Summary | PFMA 12 Chapters Explained

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The Public Finance Management Act is one of the most important pieces of legislation passed by the first democratic government in South Africa.

The PFMA came into effect from 1 April 2000 & it gives effect to the Constitution which require a national legislation to be established in order to introduce norms & standards, to prescribe measures to ensure transparency & expenditure control in all spheres of government, &, to set the operational procedures for borrowing, guarantees, procurement & oversight over the various national & provincial revenue funds.

Objectives of the PFMA Purpose of the Public Finance Management Act
- To regulate financial management in the national government & provincial governments;
- To ensure that all revenue, expenditure, assets & liabilities of those governments are
managed efficiently & effectively;
- To provide for the responsibilities of persons entrusted with financial management in those governments

PFMA promotes the objective of good financial management in order to maximise service delivery through the effective & efficient use of government’s limited resources.

The key objectives of the Act may be summarized as being to:
- Modernise the system of financial management in the public sector;
- Enable public sector managers to manage, but at the same time be held more accountable;
- Ensure the timely provision of quality information; &
- Eliminate the waste & corruption in the use of public assets.

Chapter 01 deals with definitions, objects, application & amendments. This chapter states that the Act applies to national & provincial government institutions.

Chapter 02 establishes the National Treasury & deals with its composition, functions, powers & responsibilities.

Chapter 03 establishes provincial treasuries & deal with their composition, functions, powers & responsibilities.

Chapter 04 outlines government’s budget process. This chapter further outlines how budgets can be adjusted & contains a clause on unfunded mandates.

Chapter 05 provides for the appointments of accounting officer at each & every national & provincial institutions as well as publicly owned entity. Furthermore, this chapters outlines the responsibilities of the accounting officer • Provides implications & consequences where such responsibilities such adhered to.

Chapter 06: Provides for the listing of all public entities in Schedule 2 as well we Schedule 3.

Chapter 07 covers the responsibilities of Ministers & MECs, who are referred to as the executive authorities of departments & public entities.

Chapter 08 of the Act regulates how & when government should borrow funds & determines the person who can borrow on behalf of any national or provincial government entity.

Chapter 09 outlines the areas on which the National Treasury can issue regulations & instructions. Obligates the appointment & composition of audit committees.

Chapter 10 defines what would be regarded as a financial misconduct & deals with the procedures for disciplining those public officials guilty of financial misconduct. Provides for criminal prosecution to apply where there is gross financial misconduct.

Chapter 11 establishes an Accounting Standards Board, which will have the power to determine generally recognised accounting practices for the public sector.

Chapter 12 deals with transitional aspects related to the implementation of the PFMA.

BENEFITS of PFMA
• Its provides for greater flexibility,
• It outlines the basis for assessing achievements
• It further provides a link between government plans and budgeting
• It Focuses on outputs
• It provides better accountability by Clarifying of roles and responsibilities

Disclaimer:
This publication and the information included in it are not intended to serve as a substitute for consultation with a professional. Specific issues, concerns and conditions always require the advice of an appropriate professional advisor. The use of the contained information is at the user's own discretion.

[ntandommako]

Can you please assist me with this question, how PFMA and MFMA statutory frame work for Public sector management would be beneficial to government institutions.

[sthembisomanzini]

Please can you assist me with answering this question?
Identify and describe the PFMA provisions regarding financial misconduct.

[MlungisiMthembu-evse]

please assist me if i have this scope were should i put more focus and easy strategy as i have exam in fee days
1components
2 legislative framework
3 types of budgeting
4 budget cycle
5 role playes

[emelitasibolino]

Is this applicable in the Philippines?