Statistics Act, 1999
R 385
Public Finance Management Act, 1999 (Act No. 1 of 1999)RegulationsTreasury Regulations for Departments, Constitutional Institutions and Public EntitiesPart 9 : Public entities31. Cash, banking and investment management |
| 31.1 | Cash management [Section 7(1) of the PFMA] |
| 31.1 | The accounting authority of a public entity listed in Schedule 3 is responsible for establishing systems, procedures, processes and training and awareness programmes to ensure efficient and effective banking and cash management. |
| 31.1.2 | For the purposes of this regulation, sound cash management includes: |
| (a) | collecting revenue when it is due and banking it promptly; |
| (b) | making payments no earlier than necessary, with due regard for efficient, effective and economical programme delivery and the public entity’s normal terms of account payments; |
| (c) | avoiding pre-payments for goods or services (i.e. payment in advance of the receipt of goods or services, unless required by the contractual arrangements with the supplier); |
| (d) | accepting discounts to effect early settlement when the payment has been included in the monthly cash flow estimates provided to the chief financial officer; |
| (e) | pursuing debtors with appropriate sensitivity and rigour to ensure that amounts receivable by the public entity are collected and banked promptly; |
| (f) | accurately forecasting the public entity’s cash flow in order to optimise its central cash management responsibilities; |
| (g) | timing the in and outflow of cash; |
| (h) | recognising the time value of money, i.e. economically, efficiently and effectively managing cash; |
| (i) | taking any other action that avoids locking up money unnecessarily and inefficiently, such as managing inventories to the optimum level necessary for efficient and effective programme delivery, and selling surplus or under utilized assets; |
| (j) | conducting bank reconciliations at least weekly; |
| (k) | making regular cash forecasts; |
| (l) | alignment of the approved budget with monthly cash flows; |
| (m) | variance analyses of actual cash flow with the approved budget; and |
| (n) | sweeping bank accounts to effectively utilise surplus cash. |
| 31.1.3 | The accounting authority must ensure that the public entity’s cash management performance is reported regularly, but at least on a monthly basis. |
| 31.2 | Banking framework [Sections 7(2) and (3) of the PFMA] |
| 31.2.1 | When a public entity listed in Schedule 3 of the Act intends to open a new bank account, the National Treasury must approve of the bank. For purposes of section 7(2)(a) of the Act, existing banking arrangements can be regarded as approved by the National Treasury, but the accounting authority must, by 31 May of each year, submit to the National Treasury, a list of all such banking accounts of the public entity. |
| 31.2.2 | When going to tender, and if the National Treasury has not proposed a bank, the public entity must take into account— |
| (a) | that the bank is registered with the South African Registrar of Banks; |
| (b) | that the bank is a member or sponsored by a member of the Payments Association of South Africa; |
| (c) | the bank’s contracting with persons, or categories of persons historically disadvantaged by unfair discrimination on the basis of race, gender or disability; |
| (d) | the cost effectiveness; and |
| (e) | the ability of the bank to provide the required services which through adequate systems, infrastructure and branch networks. |
| 31.2.3 | The adjudication and awarding of tenders must be done in accordance with the public entity’s own internal tendering procedures. |
| 31.2.4 | Only the accounting authority or the person to whom such authorisation has been delegated may open a bank account. |
| 31.3 | Investment policy [Sections 7(4) and 53(3) of the PFMA] |
| 31.3.1 | A public entity or a government business enterprise with funds under management must have an investment policy approved by the accounting authority. |
| 31.3.2 | The investment policy referred to in paragraph 31.3.1 must include— |
| (a) | selection of counter-parties through credit risk analyses; |
| (b) | establishment of investment limits per institution; |
| (c) | establishment of investment limits per investment instrument; |
| (d) | monitoring of investments against limits; |
| (e) | reassessment of investment policies on a regular basis; |
| (f) | reassessment of counter-party credit risk based on credit ratings; and |
| (g) | assessment of investment instruments based on liquidity requirements. |
| 31.3.3 | Unless exempted by the National Treasury, public entities that are listed in Schedule 3A or 3C of the Act must invest surplus funds with the Corporation for Public Deposits. |
| 31.3.4 | For purposes of paragraph 31.3.3, surplus funds refer to all money in excess of a given day’s projected cash flow requirements plus a liquidity buffer needed to cover unforeseen expenditure on that day. |
| 31.3.5 | Public entities exempted by the National Treasury in terms of paragraph 31.3.3 must invest surplus funds in an institution with an investment grade rating and in line with an investment policy. |
| 31.4 | Disclosure of information |
| 31.4.1 | A public entity listed in Schedule 3 of the Act must promptly disclose information regarding cash, banking and investment management when so requested by the National Treasury. |
