Reference

Remarks

C1.1

C1.2

Accounting officers should ideally examine their department's operations to identify sources or potential sources of revenue, including, for example, fees, fines, grants, levies, subsidies and forms of charging. It would be preferable if an department's review of revenue sources was carried out by managers who are familiar with the operations of the department and who are also aware of proposed initiatives that may have a revenue bearing effect. Revenue review should be a continuous process but should, as a minimum, be conducted during the budget process when resources and requirements are under consideration. Identification of revenue includes the regular evaluation of the effectiveness of the department's sources of revenue. A department should always aim to optimise its revenue sources, even if the revenue collected is not retained by the department itself, but paid into the relevant revenue fund.

C1.3

In terms of section 39 of the PFMA an accounting officer must report any impending under collection of revenue due or any shortfall in budgeted revenue to the executive authority and the relevant treasury.

C1.4

Good cash management and responsible banking practices go hand in hand. Good cash management (e.g. the prompt collection of revenues) can be nullified, at least in part, if the money collected is not promptly banked. This reflects the fact that revenue is not available to meet Government's cash flow requirements unless it has been deposited into the Paymaster- General's Bank account and may result in the Treasury having to borrow more for a period.

C2.1

C2.2

C2.3

Proper planning and in-year management and reporting are some of the critical important requirements of the PFMA. Once the financial year begins, the accounting officer must submit regular monthly management reports to the executive authority and the relevant treasury. These reports must focus on performance against the budget and should alert managers when remedial actions are required. A particular problem in recent years has been the huge amounts of unspent funds at the end of a particular financial year. This in general is the result of poor planning and accounting officers must recognise that, in most cases, the failure to utilise funds allocated by a legislature represents under-performance.

C2.4

Transfer payments are typically made to enable or assist other levels of government or non-government entities to deliver programmes (and achieve objectives) that would not otherwise be feasible. Efficiency, effectiveness, economy and transparency in the use of the money by the recipients is as important as it is for the government's own programme delivery. For this reason, accounting officers should ensure that the recipient entities have appropriate financial management and control system in place.

C2.5

In terms of Treasury Regulation 8.3.4 and 8.3.5 the person in charge at a pay-point must certify that all employees listed on the payroll report are entitled to payment. Within ten days of being certified, the payroll report must be returned to the chief financial officer. The accounting officer must ensure that all pay-point certificates have been received on a monthly basis.

C2.6

In terms of section 11(5) of the PFMA, the National Treasury must ensure that there is at all times sufficient money in the National Revenue Fund. Reliable forecasts of the timing and amounts of material cash payments and receipts by departments can mitigate the risk of the National Treasury not having sufficient funds to meet the cash flow needs of the Government's programmes. Reliable forecasts can reduce the cash buffer (represented by higher borrowings or lower investments) it would otherwise need to maintain in the NRF. Accounting officers have the important responsibility for establishing systems, procedures and processes to ensure sound cash management. They are also required to monitor cash management on a regular basis. Particular areas for attention include systems, procedures and processes for :

C2.7

To minimise the risk of fraud all payments in excess of R2000 must be effected electronically unless otherwise approved by the relevant treasury. Payments may not be split to circumvent Treasury Regulation 15.12.3 and any non-compliance with this regulation constitutes financial misconduct.