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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 3 : Planning and budgeting

6. Budgeting and related matters

 

6.1 Annual budget circular

 

6.1.1 The accounting officer of a department must comply with any annual budget circulars issued by the relevant treasury. Budget circulars issued by provincial treasuries must be consistent with any budget circular issued by the National Treasury to provincial treasuries.

 

6.1.2 The accounting officer of a constitutional institution or the accounting authority of a public entity who receives transfers appropriated by vote must provide such information as may be required by the accounting officer responsible for the vote for the purposes of complying with a budget circular. A budget submission by such a constitutional institution or public entity must be made through the accounting officer of the department responsible for transfers to that constitutional institution or public entity.

 

6.1.3 An accounting officer of a budget vote must ensure that the budget submission for that vote includes appropriate supporting information in respect of constitutional institutions and public entities receiving transfers from that vote.

 

6.2 Formats of the annual budget [Section 27(3) of the PFMA]

 

6.2.1 The annual budget documentation, as presented to Parliament or a provincial legislature, must conform to the formats as determined by the National Treasury.

 

6.3 Virement [Sections 43 and 76(3) of the PFMA]

 

6.3.1 For purposes of section 43(1) of the Act –
(a) compensation of employees and transfers and subsidies to other institutions, excluding transfers and subsidies to other levels of government for purposes of paying levies and taxes imposed by legislation, may not be increased without approval of the relevant treasury;
(b) new transfers and subsidies to other institutions may not be introduced without the approval of the relevant treasury;
(c) allocations earmarked by the relevant treasury for a specific purpose (excluding compensation of employees) may not be used for other purposes, except with its approval, and
(d) virement of funds from compensation of employees to transfers and subsidies for the payment of severance/exit packages are excluded from the provisions of (a) and (b).

 

6.4 Rollovers [Sections 30(2)(g) and 31(2)(g) of the PFMA]

 

6.4.1 Funds appropriated but not spent in a particular financial year may be rolled over to a subsequent year subject to approval of the relevant treasury. Such approval will be guided by the following limitations–
(a) Payments for capital assets: Unspent funds on payments for capital assets may only be rolled over to finalise projects or asset acquisitions still in progress.
(b) Transfers and subsidies: Savings on transfers and subsidies may not be rolled over for purposes other than originally voted for.
(c) Current payments: Savings on compensation of employees may not be rolled over. A maximum of five per cent of a department’s payments for goods and services may be rolled over.

 

6.4.2 Requests for rollovers must be submitted to the relevant treasury on or before the last working day of April, in a format determined by the National Treasury and must include—
(a) the purpose for which the funds were appropriated;
(b) the reasons why the funds were not spent;
(c) proposed changes to the use of the funds, if any; and;
(d) a disbursement schedule indicating the month(s) in which the expenditure is expected to be incurred.

 

6.4.3 Funds for a specific purpose may not be rolled over for more than one financial year, unless approved in advance by the relevant treasury.

 

6.5 Transfer of functions [Section 42 of the PFMA]

 

6.5.1 Where a function is to be transferred between votes during a financial year, the relevant treasury must be consulted in advance, to facilitate any request for the resulting transfer of funds voted for that function in terms of section 33 of the Act. In the absence of agreement between the affected departments on the amount of funds to be transferred, the relevant treasury will determine the funds to be shifted.

 

6.5.2 Should the Minister of Public Service and Administration or a Premier of a province make a determination regarding the transfer of a function between departments in terms of the Public Service Act, 1994, that determination must accompany a request for the transfer of funds as per paragraph 6.5.1. Should the Minister of Public Service and Administration or a Premier approve a function transfer after the finalisation of the adjustments estimates, it must be dealt with on a recoverable basis.

 

6.5.3 Before seeking formal approval from the Minister of Public Service and Administration or the Premier of a province for any transfer of functions to another sphere of government, the transferring accounting officer must first seek the approval of the relevant treasury or treasuries on any funding arrangements.

 

6.5.4 The transfer of functions to provinces and municipalities must be dealt with in terms of the annual Division of Revenue Act and the Local Government Municipal Finance Management Act (MFMA), 2003 (Act No. 56 of 2003).

 

6.6 Additional funds through an adjustments budget [Sections 30(2)(b) and 31(2)(b) of the PFMA]

 

6.6.1 For purposes of an adjustments budget, the following will not be considered unforeseeable and unavoidable expenditure—
(a) expenditure that, although known when finalising the estimates of expenditure, could not be accommodated within allocations;
(b) tariff adjustments and price increases; and
(c) extensions of existing services and the creation of new services that are not unforeseeable and unavoidable.

 

6.6.2 The department requesting additional funds through an adjustments budget must submit a memorandum to the relevant treasury, the Cabinet/EXCO Secretariat and any treasury committee of the Cabinet/EXCO, on a date determined by the relevant treasury.

 

6.6.3 Where a national adjustments budget allocates funds to a province, the relevant provincial treasury must table an adjustments budget within 30 days of the tabling of the national adjustments budget, or within such longer period as the National Treasury may approve.

 

6.7 Definitions introduced by the new Economic Reporting Format

 

6.7.1 For purposes of ensuring alignment between the new Economic Reporting Format, the Public Finance Management Act, 1999 and the Treasury Regulations, the following terms must be used interchangeably:
(a) Personnel expenditure referred to in the Act is the same as compensation of employees in the new Economic Reporting Format;
(b) Transfer referred to in the Act is the same as transfers in the new Economic Reporting Format for entities of government, but excludes public entities listed in Schedules 2, 3B and 3D to the Act;
(c) Transfers referred to in the Act that are made to public entities listed in Schedules 2, 3B and 3D to the Act are the same as transfers and subsidies in the new Economic Reporting Format; and
(d) Capital expenditure referred to in the Act is the same as payments for capital assets in the new Economic Reporting Format.