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Financial Management of Parliament Bill: Separate Legislation for Legislatures

This presentation discusses the need for separate financial management legislation for legislatures, including the role of executive authority/accounting officer, financial matters of constitutional institutions, planning and budgeting, and proposed additions/deletions to the bill.

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Financial Management of Parliament Bill: Separate Legislation for Legislatures

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  1. FINANCIAL MANAGEMENT OF PARLIAMENT BILL Nols du Plessis Marion Mbina National Treasury 15 November 2005

  2. Content of presentation • Separate Financial Management Legislation for Legislatures • Role of Executive Authority / Accounting Officer • Financial matters of Constitutional Institutions • Planning, budgeting and related matters • Other comments on specific provisions • Proposed additions / deletions to Bill

  3. Separate Financial Management Legislation for Legislatures Treasury would prefer to accommodate financial management of legislatures within the Public Finance Management Act • Constitution envisages an integrated Public Finance Management Framework (sections 73(2), 213 and 216). • Separate legislation carries risk of fragmented and irreconcilable financial arrangements, especially at Provincial and Local Government level. • Amendments to PFMA are proposed to deal with the independence and financial autonomy of legislatures. • Bill in its current form largely reproduces provisions in PFMA and MFMA. • Several provisions are based on earlier drafts of a PFMA Amendment Bill still under consideration and likely to be revised.

  4. Role of Executive Authority / Accounting Officer • Speaker of National Assembly and Chairperson of the NCOP are jointly the Executive Authority of Parliament • Executive authority is accountable to Parliament for sound financial management • Secretary of Parliament is the accounting officer of Parliament • Executive authority may make regulations or issue instructions • It is proposed that these principles should underpin a separate chapter in the PFMA dealing with financial management of legislatures

  5. Financial matters of Constitutional Institutions Treasury would like to see direct financial accountability of Constitutional institutions to the legislature • Constitutional institutions are accountable to and report to the National Assembly on the performance of their functions. • Funds for these institutions are currently appropriated by Parliament on the votes of various departments. • It is recommended that funding of these institutions should be dealt with on the Vote of Parliament. • Financial management legislation for Parliament should accordingly also regulate the financial affairs of these Institutions.

  6. Planning, Budgeting and Related matters • Provisions regarding strategic plan (5 years) and annual operational plan (3 years) are still under consideration (sec 12 & 13). • Parliament’s budget must include funds to be appropriated, direct charges and expenditure to be funded from own revenue sources (sec 14). • It is recommended that donor funding should be dealt with in accordance with the requirements of the Reconstruction and Development Programme Fund Act, 1998 (sec 14(2)(f)). • Legislation needs to provide for the retention of surplus funds after year end (sec 20 & 21). • Recommendations regarding an adjustments budget should be aligned with process to finalise and purpose for which Minister of Finance can table an adjustments budget (sec 52).

  7. Comments on Specific Provisions • Definition of unauthorised expenditure should exclude the reference to expenditure from donor funding • Sec 19(3): Savings on (a) – (c) should be utilised subject to approval by the executive authority • Sec 26(1)(b): The reference to “indemnity” should be deleted • Sec 26(3)(b): Should be limited to operational leases • Sec 36(3): Provision should be reworded and aligned with sec 16 (emergency spending) and sec 30(2)(b) (unforeseen and unavoidable expenditure) of the PFMA. • Sec 66 & 67: Provisions should also refer to sec 9 of the Bill (responsibilities of officials). • Schedule 1: Norms & Standards for provincial legislatures not sufficient to ensure uniformity.

  8. Proposed additions / deletions to the Bill • Provisions to allow for departures from regulations and condonation of non compliance • Similar provision as contained in section 40(4)(a) of the PFMA (cash flow projections) should be included • Section 17 of the bill (expenditure before budget is passed) can be deleted as section 29 of the PFMA is applicable

  9. Recommendation: Portfolio Committee and National Treasury form a small task group to review the proposed legislation and consider option of a separate chapter of the PFMA to deal with financial management of legislatures

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