[{"bbox": [85, 191, 436, 217], "category": "Section-header", "text": "### 2.4.3 Public Financial Management"}, {"bbox": [85, 220, 500, 244], "category": "Section-header", "text": "#### The fundamentals of PFM in South Africa"}, {"bbox": [85, 246, 1145, 380], "category": "Text", "text": "The **Public Finance Management Act (PFMA)** is the cornerstone of public financial management in South Africa. It sets out key responsibilities for accounting officers and executive authorities and provides clear guidelines on how public funds should be used. Supporting legislation, such as the **Municipal Finance Management Act (MFMA)** and the **Division of Revenue Act**, ensures consistency across national, provincial, and municipal levels of government."}, {"bbox": [85, 391, 1145, 525], "category": "Text", "text": "**The Budgeting Process** is framed within a **Medium-Term Expenditure Framework (MTEF)**, which sets three-year rolling expenditure plans. This process ensures predictability in funding and alignment with government priorities. The **National Treasury** plays a leading role in preparing the national budget, which involves consultations with departments, public stakeholders, and provincial governments. Public participation is also promoted, ensuring inclusivity and transparency in the allocation of funds."}, {"bbox": [85, 537, 1145, 617], "category": "Text", "text": "Departments must produce **monthly, quarterly, and annual financial reports**, which the National Treasury and the Auditor-General then review. Financial reporting also plays a critical role in policymakers' decision-making and enhances public scrutiny."}, {"bbox": [85, 628, 1145, 709], "category": "Text", "text": "The PFMA mandates that government entities establish **internal controls that minimize fraud, errors, and inefficiencies**. Risk management units within departments assess vulnerabilities and develop mitigation strategies, ensuring better governance and reducing financial irregularities."}, {"bbox": [85, 720, 1145, 854], "category": "Text", "text": "**Supply Chain Management (SCM)** is critical to ensuring that government procurement is cost-effective, competitive, and free from corruption. The National Treasury is the biggest purchaser in the country. The PFMS lays down strict procurement guidelines and procedures, which include tender processes, bid adjudication committees, and compliance audits. However, the system has faced criticism for delays and loopholes that allow corruption, which the government is actively working to address."}, {"bbox": [85, 866, 183, 892], "category": "Section-header", "text": "#### Strengths"}, {"bbox": [85, 892, 1145, 1026], "category": "Text", "text": "Undoubtedly, transparency (see next section) and accountability are the key features of the country's PFM system. The requirement for public financial disclosures, independent audits, and parliamentary reviews ensures transparency in the use of public funds. Tools such as the Online Budget Portal (South African Government Budgets 2024-25 - vulekamali) and Municipal Financial Data Dashboards (Municipal Finance Data) make information accessible to the public, empowering civil society to hold officials accountable."}, {"bbox": [85, 1037, 1145, 1118], "category": "Text", "text": "Financial discipline has been strengthened through initiatives such as zero-based budgeting, which assesses every expenditure from scratch instead of incrementally increasing previous budgets. Mechanisms to track under- or overspending by departments have reduced wastage and ensured funds are redirected to priority areas."}, {"bbox": [85, 1129, 1145, 1317], "category": "Text", "text": "Training programs, workshops, and specialized courses have been introduced to ensure government officials are well-equipped to handle financial responsibilities. Partnerships with institutions like the South African Institute of Chartered Accountants (SAICA) have provided additional technical support. The European Union has played a critical role in the continuous improvement of public finance management by providing support for capacity development at national and subnational levels through five technical assistance projects since 1998 (FMIP I,II, III and the latest iteration of the project – now completed PFM Capacity Development for Improved Service Delivery¹⁰ project."}, {"bbox": [85, 1344, 1145, 1452], "category": "Text", "text": "The Gender Responsive Planning, Budgeting, Monitoring, Evaluation and Auditing Framework (GRPBMEAF) was approved by the government/Cabinet in 2019 To ensure WEGE (Women Empowerment and Gender Equality) are at the centre of public policy priorities, results- Key based planning, budgeting and strategic accountability. When the GRPBMEAF was developed it mainly focused on gender, but now it includes youth and people with disabilities¹¹."}, {"bbox": [85, 1577, 320, 1600], "category": "Footnote", "text": "¹⁰ APP 2017 – 15 million EUR"}, {"bbox": [85, 1601, 648, 1647], "category": "Footnote", "text": "¹¹https://www.parliament.gov.za/storage/app/media/Pages/2024/02-08-2024_members_induction/docs/Oversight_andAccountability/depart1.pdf"}, {"bbox": [1027, 1682, 1145, 1706], "category": "Page-footer", "text": "Page 11 of 29"}]