[{"bbox": [86, 152, 195, 178], "category": "Section-header", "text": "## Challenges"}, {"bbox": [86, 179, 1145, 285], "category": "Text", "text": "Despite the robust legislative framework, non-compliance with PFMA provisions is widespread, particularly in municipal governments. Irregular expenditures, which refer to spending outside the prescribed legal framework, amounted to billions of rands annually, according to the Auditor General South Africa (AGSA). Also, many government entities fail to submit timely financial reports, reflecting weak enforcement mechanisms."}, {"bbox": [86, 297, 1145, 378], "category": "Text", "text": "In key areas, such as financial management, internal auditing, and risk assessment, human resources constraints and qualified officers (or lack thereof) are needed. Also, the high turnover of financial managers, especially in municipalities, has created instability and poor institutional memory."}, {"bbox": [86, 388, 1145, 496], "category": "Text", "text": "Unfortunately, corruption is one of the most significant threats to the PFM, with high-profile cases such as the mismanagement of COVID-19 relief funds exposing vulnerabilities in the system. Collusion between government officials and private contractors has led to inflated project costs, substandard services, and misallocation of resources (Auditor-General South Africa | AGSA)."}, {"bbox": [86, 507, 1145, 562], "category": "Text", "text": "While anti-corruption agencies like the Special Investigating Unit are working on curbing such practices, systemic corruption remains a persistent issue."}, {"bbox": [86, 573, 1145, 681], "category": "Text", "text": "Poorly designed and slow procurement processes have resulted in unnecessary delays in delivering critical services. Instances of sole-source procurement (where only one supplier is considered) bypass competitive bidding and create opportunities for favouritism and inflated pricing. The lack of a unified digital system for procurement tracking has made monitoring and accountability difficult."}, {"bbox": [86, 692, 431, 718], "category": "Section-header", "text": "## Recent Developments and Reforms"}, {"bbox": [86, 719, 1145, 800], "category": "Text", "text": "**Enhanced Oversight:** The National Treasury has increased its oversight functions by conducting regular financial health assessments of government entities. Stricter performance benchmarks are being set, particularly for poorly performing municipalities, which have been placed under administration when necessary."}, {"bbox": [86, 810, 1145, 915], "category": "Text", "text": "**Anti-Corruption Measures:** Government agencies such as the SIU, National Prosecuting Authority (NPA), and the Directorate for Priority Crime Investigation (Hawks) have intensified investigations into corruption. The establishment of the State Capture Commission highlighted the extent of corruption and provided actionable recommendations for reform."}, {"bbox": [86, 928, 1145, 983], "category": "Text", "text": "**Capacity Enhancement Programs:** Several initiatives have been launched to upskill public servants. Partnerships with universities and professional bodies aim to address the skills deficit in finance-related areas."}, {"bbox": [86, 994, 1145, 1075], "category": "Text", "text": "**Digitization and E-Governance:** The government is exploring using technology to improve procurement, financial reporting, and monitoring processes. Tools like the e-Government Procurement System (e-GP) aim to reduce inefficiencies and curb corruption."}, {"bbox": [86, 1086, 1145, 1194], "category": "Text", "text": "Finally, it is important to note that the EU Delegation is specifically following progress and reforms in these area : (1) the FMIS - initiated in 2015 - potential rolling out in 2024-2025, (2) the supply chain management and public procurement reform and (3) the municipal finance management¹² and the implementation of the mSCOA (Municipal chart of accounts introduced by the National Treasury)."}, {"bbox": [86, 1205, 1145, 1259], "category": "Text", "text": "**In conclusion, the public finance management reform strategy is sufficiently relevant and credible, including on domestic revenue mobilisation, and the eligibility criterion is met.**"}, {"bbox": [86, 1270, 554, 1299], "category": "Section-header", "text": "### 2.4.4 Transparency and Oversight of the Budget"}, {"bbox": [86, 1341, 1145, 1425], "category": "Text", "text": "The 2023 Open Budget Survey shows mixed results for South Africa. South Africa remains in the top five countries for the transparency criteria (a slight slippage compared to previous years), scoring 83/100 behind Georgia, New Zealand, and Sweden. The whole set of statutory budget documentation is published with Swiss punctuality on the"}, {"bbox": [86, 1536, 1145, 1624], "category": "Footnote", "text": "¹² Co-financed by the EU Delegation is the Asivikelane Initiative implemented by IBP South Africa. Asivikelane is a powerful coalition of a dozen organizations, which has participants from over 500 informal settlements across 10 municipalities. Informal settlement residents respond to surveys about their access to water, clean toilets and waste removal, which are shared with municipal and national officials monthly resulting in improved access to water and sanitation services for these residents."}, {"bbox": [86, 1624, 463, 1646], "category": "Footnote", "text": "¹³ South Africa - International Budget Partnership"}, {"bbox": [1028, 1681, 1145, 1706], "category": "Page-footer", "text": "Page 12 of 29"}]