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

Regulations

Treasury Regulations for Departments, Constitutional Institutions and Public Entities

Part 5 : Asset and liability management

14. Money and property held in trust

 

14.1 General

 

14.1.1 Regulation 15 is not applicable to the management of trust money.

 

14.2 Responsibility for trust money and property [Section 76(1)(c) of the PFMA]

 

14.2.1 For purposes of this regulation, trust money or property is money or property that does not belong to the State and that is held by an institution on behalf of other persons or entities in terms of a deed of trust or equivalent instrument that details the specific purposes for which it may be used.

 

14.2.2 The accounting officer, through the chief financial officer or a duly authorised agent, is responsible for the safekeeping and proper use of trust money and property, in accordance with the relevant deed of trust or equivalent instrument.

 

14.2.3 The institution, or its duly authorised agent, may charge a fee for the administration of a trust account at rates approved by the board of trustees or, in its absence, as agreed with the trustee. Such fees are payable from the trust account and are revenue accruing to the relevant revenue fund.

 

14.3 Trust money must be kept in a trust account

 

14.3.1 The accounting officer must, for each separate portion of trust money –
(a) open and maintain a separate bank account, called a trust account;
(b) assign to the trust account a name or title that clearly identifies the account;
(c) maintain separate accounting records for each trust account, of the transactions, including investment transactions, undertaken; and
(d) annually prepare separate annual financial statements that comply with generally accepted accounting practice.

 

14.4 Investment of trust money

 

14.4.1 The accounting officer may, provided that it does not conflict with the terms of the trust arrangement, invest any trust money on such terms and conditions as may be appropriate–
(a) on deposit with any bank within or outside South Africa as approved by the National Treasury;
(b) in public securities issued by the government; or
(c) in other securities approved by the National Treasury.

 

14.4.2 The proceeds of an investment, including interest and realised capital gains, and all money received from the realisation, sale or conversion of securities, must be treated as money of the trust on whose behalf the money was invested.