Public Finance Management Act, 1999 (Act No. 1 of 1999)

Chapter 6 : Public Entities

Purchase

(1)	An accounting authority for a public entity—

(a)	must ensure that that public entity has and maintains—

(i)	effective, efficient and transparent systems of financial and risk management and internal control;

(ii)	a system of internal audit under the control and direction of an audit committee complying with and operating in accordance with regulations and instructions prescribed in terms of sections 76 and 77; and

(iii)

an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost-effective;

(iv)	a system for properly evaluating all major capital projects prior to a final decision on the project;

(b)	must take effective and appropriate steps to-

(i)	collect all revenue due to the public entity concerned; and

(ii)	prevent irregular expenditure, fruitless and wasteful expenditure, losses resulting from criminal conduct, and expenditure not complying with the operational policies of the public entity; and

(iii)

manage available working capital efficiently and economically;

(c)	is responsible for the management, including the safeguarding, of the assets and for the management of the revenue, expenditure and liabilities of the public entity;

(d)	must comply with any tax, levy, duty, pension and audit commitments as required by legislation;

(e)	must take effective and appropriate disciplinary steps against any employee of the public entity who—

(i)	contravenes or fails to comply with a Provision of this Act;

(ii)	commits an act which undermines the financial management and internal control system of the public entity; or

(iii)

makes or permits an irregular expenditure or a fruitless and wasteful expenditure;

(f)	is responsible for the submission by the public entity of all reports, returns, notices and other information to Parliament or the relevant provincial legislature and to the relevant executive authority or treasury, as may be required by this Act;

(g)	must promptly inform the National Treasury on any new entity which that public entity intends to establish or in the establishment of which it takes the initiative, and allow the National Treasury a reasonable time to submit its decision prior to formal establishment; and,

(h)	must comply, and ensure compliance by the public entity, with the provisions of this Act and any other legislation applicable to the public entity.

(2)	If an accounting authority is unable to comply with any of the responsibilities determined for an accounting authority in this Part, the accounting authority must promptly report the inability, together with reasons, to the relevant executive authority and treasury.