Managers often complain about the quality of the financial information provided to them, but fail to appreciate that they are in a position to improve the situation by interrogating the reports they receive. For example, the quality of the information produced depends crucially on the accuracy and timeliness of the data entered into the various systems. Accounting officers will need to ensure that all staff involved in these processes have suitable capacity. The quality of the information will only improve if accounting officers and CFOs consider, test and use such information.

A number of quality issues have been identified and are receiving attention. They are summarised below, as in a number of instances, accounting officers may be able to instigate improvements within their departments.

1.  Mapping of links

At present, there are a number of instances of imperfect ‘mapping’ from feeder and/or accounting systems into the Vulindela database, which stem from the nature of the data structures within the different systems. This is further complicated by the fact that the chart of accounts is used in different ways across departments. The requirement to publish data by ‘main division’ and the desire to build reliable histories upon which projections can be based place an additional burden in that programmes may not always run consistently from year to year, and hence a considerable effort will be required to ensure that all linkages are correctly specified by the department concerned.

2.  Roll out of ‘Vulindlela’

A data warehouse with a user-friendly ‘front end’, known as ‘Vulindlela’, has been developed to extract relevant data from the various accounting systems, in order to facilitate reporting by departments. Vulindlela will be made available to all users in the coming months.

In addition to facilitating monthly reporting practices, Vulindlela will contain monthly (and yearly) expenditure and revenue information (budget, actual and forecast), and will also be used to monitor asset and liability information and to assist in the eventual financial consolidations required in terms of section 8 and 19 of the PFMA. In order to facilitate budget analysis, the database will ultimately hold a history of 5 years, and is currently being used for reporting in terms of the internationally agreed system of ‘Government Finance Statistics’.

One of the reasons that individuals doubt the credibility of the Vulindela system is that the figures extracted do not appear to reconcile to other data. In most cases, this is simply the result of ‘timing differences’, which will be eliminated with adherence to an agreed schedule of deadlines for interfaces etc to be completed.

3.  Suspense accounts

One of the reasons that data may be unreliable is the (mis-) use of suspense accounts, which could result in expenditure being under-recorded. In order to eliminate this problem, the Treasury Regulations require that these accounts are cleared each month, and this will be monitored in the future.

4.  Definitions of content in pro forma reports

At present, the data reported by departments may be inconsistent, in that various ‘off-budget’ items may be included in some cases. It is essential to ensure that there is a common understanding of the treatment of donor-funded expenditure, agency payments and expenditure of non-voted funds such as trading entities. A precise definition of the content of reports will be agreed for circulation.

5.  Personal Responsibilities

The major thrust of the PFMA is to enhance accountability throughout government, and this cannot be achieved unless there is a clear understanding of which official is responsible for each aspect of the reporting process. One example of this is the requirement that each Accounting Officer formally ‘signs-off’ his or her departmental monthly report before submission to the relevant Treasury.

6.  Month-end processes, and restatement of previous months figures

At present, the procedure for the monthly closure of ledgers allows for a 3 month "window" period during which transactions (such as those from control accounts, Deposit, Orders payable and Consolidated Paymaster General accounts) can be posted into a previous month. Clearly, this process of "backdating" transactions to previous months may compromise key aspects of financial management, particularly the correct reflection of revenue and expenditure, and hence the provision of reliable management information. In future, it must be agreed that all ledgers will close by the latest on the 10th day of the following month, and if departments fail to do this, the Office of the Accountant-General will ‘force’ the closure electronically.

7.  Treatment of source documents

The output of any system is only as good as the data that is input, and there are quality issues around the coding of source documents and the treatment of batches that must be addressed within departments by the Accounting Officer.

8.  ‘White book’ not always loaded

There are many cases where the approved budget, as specified in the ‘White book’, is not loaded into the accounting system, making it impossible to compare actual results with the budget.

9.  Use of Data

If the data contained in the reports, generated by a fairly complex process, are not seen by those preparing them to be used for any meaningful purpose, then it is likely that diminishing efforts will be given to the process. It is the responsibility not only of Accounting Officers to use the information contained in the reports in managing their Departments, but also of the National Treasury to been seen to make constructive use of the information submitted to them.

10. Functional responsibilities between Departments & Treasuries

The PFMA emphasizes the responsibilities of Accounting Officers, yet this has often undermined in the past by Treasuries assuming inappropriate responsibility for work that should be undertaken within Departments. While it is recognized that patterns of behaviour which have been entrenched over many years cannot be reversed overnight, changes must be made to signal clearly that the Treasury is no longer a ‘financial policeman’ and that Accounting Officers must assume their responsibilities.