The tool utilised by the majority of departments for capturing and monitoring budgetary information is the ‘Financial Management System’ (FMS). An online budgeting facility is available, which can show the approved appropriation allocated by the relevant legislature. This facility allows for two years budgets to be captured and updated on the system (the current financial year, Y0; plus the forthcoming year, Y0+1). The original budget can be reflected separately from the adjustment budget, and the current budget figure is continuously be available for control purposes.

Reports available on FMS

Profiles of Expenditure

Profiles of expenditure are month-by-month estimates of anticipated departmental expenditure, and the figures should reflect all likely charges against any Vote (or program) for any ensuing month.

An interface from the PERSAL system supplies an automatic projection of expenditure to FMS, based on the actual post establishment (any change to the PERSAL post establishment will result in an automatic change to FMS). Other non-personnel costs are maintained manually, based on item specific criteria. Projections can be created from an estimate, a budget, a previous trend or from a specific amount.

The following financial control facilities are available on FMS:

The budget figure on the system plays a critical role in exception reporting. ‘Plus’ figures reflect a potential saving for the department, whist a ‘negative’ figure reflects a potential overexpenditure.

The early identification of these variances is critical to expenditure management and to the requesting of additional funding.

Failure to maintain both the profile and budget figures will render the expenditure control report worthless. Because these figures can be maintained online, the results of changes can be viewed and/or updated immediately which enhances the decision making process.

Commitments

FMS will register, track, reduce and clear commitments that are processed via the periodic payment system. The newly released LOGIS procurement system enforces commitment of orders as standard procedure. Details of individual commitments are recorded on FMS by way of the unique order number and can, subject to the necessary approval, be amended to more accurately reflect the final expenditure. Managers who do not enforce the system committing of funds in their departments run the risk of over expenditure on the budget.

Financial Authorities

The facility of Financial Authorities on the FMS is in place to address those items of expenditure that are classified as column 2 items in the appropriation, or item values which by law cannot exceed the value at which they were appropriated. As payments are made for items in this category, FMS tracks the expenditure and produces exception messages when predetermined thresholds are reached. The system will not allow the value of a financial authority to be exceeded and so acts as a very secure mechanism in assisting the manager to maintain strict fiscal discipline.

Outstanding Payments

FMS includes a periodic payment system, which generates payments against certified orders, on the instruction of the Periodic Payment Controller. There are normally three frequencies of cheque generation in the periodic payment system, namely, weekly, two weekly and monthly, although orders are processed on a daily basis on the FMS without physical cheques being generated. These processed orders fall into the category of outstanding payments. This process ensures that strict control can be maintained over the drawings on the department’s bank account, ensuring improved cash flow management.