Public Finance Management Act [No.1 of 1999]
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27. 28. 29, 30. 32. 33. 34.
36. 37.
38. 39. 40. 41. 42. 43.
44. 45.
46. 47. 48.
49. 50. 51. 52.
53. 54. 55.
56. 57.
58. 59. 60.
National budgets Multi-year budget projections Expenditure before annual budget is passed National adjustments budget Publishing of reports on state of budget Withholding of appropriated funds Unauthorised expenditure
CHAPTER 5
DEPARTMENTS AND CONSTITUTIONAL INSTITUTIONS
Part 1: Appointment of accounting oficers
Accounting oficers Acting accounting officers
Par( 2: Responsibilities of accounting oficers
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General responsibilities of accounting officers Accounting officers’ responsibilities relating to budgetary control 15 Accounting officers’ reporting responsibilities Information to be submitted by accounting officers Accounting officers’ responsibilities when assets and liabilities are transferred Vlrement between main divisions within votes
Part 3: Other oflcials of departments and constitutional institutions 20
Assignment of powers and duties by accounting officers Responsibilities of other officials
CHAPTER 6
PUBLIC ENTITIES
Part 1: Application of this Chapter
Application Unlisted public entities Classification of public entities
Part 2: Accounting authorities for public entities
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Accounting authorities 30 Fiduciary duties of accounting authorities General responsibilities of accounting authorities Annual budget and corporate plan by Schedule 2 public entities and government business enterprises Annual budgets by non-business Schedule 3 public entities 35 Information to be submitted by accounting authorities Annual reports and financial statements
Part 3: Other oficials of public entities
Assignment of powers and duties by accounting authorities Responsibilities of other officials
Part 4: External auditors
Appointment of auditors Discharge of auditors Duties and powers of auditors
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,icl No. 1, 199Y PL”BLIC FIN.ANCE N1.\X.4GENlENT .\ CT, 199Y
61. 62.
63. 64. 65.
66. 68. 69. 70.
71. 72. 73. 74. 75.
76. 77. 78. 79. 80.
81. 82. 83. 84. 85.
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Reports of audi[or Duties and powers of Auditor-General
CHAPTER 7
EXECUTIlzE AUTHORITIES
Financial responsibilities of executive authorities Executive directives having financial implications Tabling in legislatures
CHAPTER 8
LOANS, GUARANTEES AND OTHER COMMITMENTS
Part 1: General principles
Restrictions on borrowing, guarantees and other commitments Consequences of unauthorised transactions Regulations on borrowing by public entities Guarantees, indemnities and securities by Cabinet members
Part 2: bans by national government
Purposes for which Minister may borrow money Signing of loan agreements Interest and repayments of loans to be direct charges Repayment, conversion and consolidation of loans Obligations from lien over securities
CHAPTER 9
GENERAL TREASURY MATTERS
Treasury regulations and instructions Audit committees Publishing of draft treasury regulations for public comment Departures from treasury regulations, instructions or conditions Determination of interest rates for debt owing to state
CHAPTER 10
F~ANCML MISCONDUCT
Part 1: Disciplinary proceedings
Financial misconduct by officials in departments and constitutional institutions Financial misconduct by treasury officials Financial misconduct by accounting authorities and officials of public entities Applicable legal regime for disciplin~ proceedings Regulations on financial misconduct procedures
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Part 2: Criminal proceedings
Offences and penalties
CHAPTER 11
ACCOUNTING STANDARDS
Establishment
BOARD
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S8. Composition 89. Functions of Board 90. Powers of Board 91. Regulations on accounting standards of Board
CHAPTER 12
hlISCELLANEOUS
92. Exemptions 93. Transitional provisions 94. Repeal of legislation 95. Short title and commencement
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SCHEDULES
CHAPTER 1
INTERPRETATION, OBJECT, APPLICATION AND AMENDMENT OF THIS ACT
Definitions 15
1. In this Act, unless the context otherwise indicates— “accounting oficer” means a person mentioned in section 36; “accounting authority” means a body or person mentioned in section 49; “Accounting Standards Board” means the board established in terms of section 87; 20 “annual Division of Revenue Act” means the Act of Parliament which must annually be enacted in terms of section 214(1) of the Constitution; “constitutional institution” means an institution listed in Schedule l; “department” means a national department; “executive authority”- 25 (a) in relation to a national department, means the Cabinet member who is
accountable to Parliament for that department; and (b) in relation to a national public entity, means the Cabinet member who is
accountable to Parliament for that public entity or in whose portfolio it falls; “financial year”- 30 (a) means a year ending 31 March; or (b) in relation to a national public entity that existed when this Act took effect and
that has a different financial year in terms of other legislation, means that financial year, provided the National Treasury has approved that other financial year; 35
“financial statements” means statements consisting of at least— (a) a balance sheet: (b) an income statement; (c) a cash-flow statement; (d) any other statements that may be prescribed; and 40 (e) any notes to these statements; “fruitless and wasteful expenditure” means expenditure which was made in vain and would have been avoided had reasonable care been exercised; “generally recognised accounting practice” means an accounting practice complying in material respects with standards issued by the Accounting Standards 45 Board; “irregular expenditure” means expenditure, other than unauthorised expendi- ture, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation. including— (a) this Act; or 50 (b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations
made in terms of that Act; “main division within a vote” me~s one of the main segments into which a vote is divided and which—
(u) specifies the total amount which is appropriated for the items under that segment: and
(/J) is approled by Parliament as part of the vote: “Minister’. means the Minister of Finance; “national department.’ means— 5 (u) a department lis[ed in Schedule 1 of the Public Service Act, 1994
(Proclamation No. 103 of 1994), but excluding a provincial administration; or (b) an organisational component listed in Schedule 3 of that Act; “national government business enterprise” means an entity which— (a) is a juristic person under the ownership control of the national executive; 10 (b) has been assigned financial and operational authority to carry on a business
activity; (c) as its principal business. provides goods or services in accordance with
ordinary business principles: and (d) is financed fully or substantially from sources other than—
(i) the National Revenue Fund; or 15
(ii) by way of a tax, le~y or other statutory money; “national public entity” means— (a) a national government business enterprise; or (b) a board, commission, company, corporation, fund or other entity (other than a 20
national government business enterprise) which is— (i) established in terms of national legislation ;
(ii) fully or substantially funded either from the National Revenue Fund, or by way of a tax, levy or other money imposed in terms of national legislation: and 25
(iii) accountable to Parliament: “National Treasury” means the National Treasury established by section 5; “overspending”- (a) in relation to a vote, means when expenditure under the vote exceeds the
amount appropriated for that vote; or 30 (b) in relation to a main division within a vote, means when expenditure under the
main division exceeds the amount appropriated for that main division, subject to section 43;
“ownership control “, in relation to an entity, means the ability to exercise any of the following powers to govern the financial and operating policies of the entity in 35 order to obtain benefits from its activities: (u) To appoint or remove all, or the majority of, the members of that entity’s board
of directors or equivalent governing body; (b) to appoint or remove that entity’s chief executive officer; (c) to cast all, or the majority of, the votes at meetings of that board of directors 40
or equivalent governing body; or (d) to control all, or the majority of, the voting rights at a general meeting of that
entity; “prescribe” means prescribe by regulation or instruction in terms of section 76: “public entity” means a national public entity; 45 “Revenue Fund” means— (a) the National Revenue Fund mentioned in section 213 of the Constitution; “this Act” includes any regulations and instructions in terms of section 69,76, 85 or 91; “trading entity.’ means an entity operating within the administration of a 50 department for the provision or sale of goods or services, and established— (u) in the case of a national department, with the approval of the National
Treasury; “treasury” means the National Treasury; “unauthorised expenditure” means— 55 . (a) overspending of a tote or a main division within a vote; (b) expenditure not in accordance with the purpose of a vote or, in the case of a
main division, not in accordance with the purpose of the main division; “vote” means one of the main segments into which an appropriation Act is divided and which- 60 (u) specifies the total amount which is usually appropriated per department in an ‘
appropriation Act; and
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(II) is separately approved b! Parliament before it approves tbe relevant drof[ ~ppropriiltiotl” Act ai SUCII,
Object of this Act
2. The object of this Act is to secure transparency, accountability. and sound management of the revenue, expenditure, assets and liabilities of the institutions to which this Act applies.
Institutions to which this Act applies
3. ( 1 j This Act, to the extent indicated in the Act, applies to— (a) departments; (b) public entities listed in Schedule 2 or 3; (c) constitutional institutions: and (d) Parliament, subject to subsection (2).
(~) To the extent that a provision of this Act applies t~ (a) Parliament, any controlling and supervisory functions of the National
Treasury in terms of that provision are performed by the Speaker of the National Assembly and the Chairperson of the National Council of Provinces, acting jointly.
(3) In the event of any inconsistency between this Act and any other legislation, this Act prevails.
Amendments to this Act
4. Draft legislation directly or indirectly amending this Act, or providing for the enactment of subordinate legislation that may conflict with this Act, may be introduced in Parliament—
(a) by the Minister only; or (b) only after the Minister has been consulted on the contents of the draft
legislation.
CHAPTER 2
NATIONAL TREASURY AND NATIONAL REVENUE FUND
Part 1: NatioItal Treasuq
Establishment
5. (1) A National Treasury is hereby established, consisting of— (a) the Minister, who is the head of the Treasury; and (b) the national department or departments responsible for financial and fiscal
matters. (2) The Minister. as the head of the National Treasury, takes the policy and other
decisions of the Treasury, except those decisions taken as a result of a delegation or instruction in terms of section 10.
Functions and powers
6. (1) (a)
(b) (c) (d)
(e) (f) (x)
The National Treasury must— promote the national government’s fiscal policy framework and the co- ordination of macro-economic policy; co-ordinate intergovernmental financial and fiscal relations; manage the bud&et preparation process; exercise control over the implementation of the annual national budget, including any adjustments budgets; facilitate the implementation of the annual Division of Revenue Act; monitor the implementation of provincial budgets; promote and enforce transparency and effective management in respect of revenue, expenditure, assets and liabilities of departments, public entities and constitutional institutions; and
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(~i) ptrform the other functions assigned to the National Tre:tsury in terms of this Act.
(2) To the extent necessary to perform the functions mentioned in subsection ( 1). the National Treasury—
((i) must prescribe uniform treasury norms and standards; 5 (/7) must enforce this Act and any prescribed norms and standards, including any
prescribed standards of generally recognised accounting practice and uniform classification systems. in national departtnents;
(c) must monitor and assess the implementation of this Act. including any prescribed norms and standards. in national public entities and in constitu- 10 tional institutions;
(d) may assist departments and constitutional institutions in building their capacity for efficient, effective and transparent financial management;
(e) may investigate any system of financial mana&ement and internal control in any department, public entity or constitutional institution; 15
(~) must intervene by taking appropriate steps, which may include steps in terms of section 100 of the Constitution or the withholding of funds in terms of section 216(2) of the Constitution, to address a serious or persistent material breach of this Act by a department, public entity or constitutional institution; and 20
(g) may do anythin& further that is necessary to fulfil its responsibilities effectively.
(3) Subsections (1) (g) and (2) apply to public entities listed in Schedule 2 only to the extent provided for in this Act.
Banking, cash management and investment framework 25
7. (1) The National Treasury must prescribe a framework within which departments, public entities listed in Schedule 3 and constitutional institutions must conduct their cash management.
(2) A department authorised to open a bank account in terms of the prescribed framework, a public entity or a constitutional institution may open a bank account 30 o n l y -
(a) with a bank registered in South Africa and approved in writing by the National Treasury; and
(b) after any prescribed tendering procedures have been complied with. (3) A department, public entity listed in Schedule 3 or constitutional institution may 35
not open a bank account abroad or with a foreign bank except with the written approval of the National Treasury.
(4) The National Treasury may prescribe an investment policy for public entities, constitutional institutions and those departments authorised to open a bank or other account in terms of the prescribed framework. 40
(5) A bank which has opened a bank account for a department, a public entity listed in Schedule 3 or a constitutional institution, or any other institution that holds money for a department, a public entity listed in Schedule 3 or a constitutional institution, must promptly disclose information regarding the account when so requested by the National Treasury or the Auditor-General. 45
Annual consolidated financial statements
8. ( 1 ) The National Treasu~ must— (a) prepare consolidated financial statements in accordance with generally
recognised accounting practice for each financial year in respect of— (i) national departments; 50 .
(ii) public entities under the ownership control of the national executive; (iIi) constitutional institutions: (iv) the South African Reserve Bank; (Y) the Auditor-General: and
(vi) parliament: and 55 (17) submit those statements for audit to the Auditor-General within three months
after the end of that financial year.
(2) The Auditor-General must audit the consolidated financial statements and submit an audit report on the statements to the National Treasury within three months of receipt of the statements.
(3) The Minister must submit the consolidated financial statements and the audit report on those statements within one month of receiving the report from the 5 Auditor-General, to Parliament for tabling in both Houses.
(4) The consolidated financial statements must be made public when submitted to Parliament.
(5) If the Minister fails to submit the consolidated financial statements and the Auditor-General’s audit report on those statements to Parliament within seven months 10
after the end of the financial year to which those statements relate— (a) the Minister must submit to Parliament a written explanation setting out the
reasons why they were not submitted; and (b) the Auditor-General may issue a special report on the delay.
Financial statistics and aggregations 15
9. The National Treasury may annually compile in accordance with international standards, and publish in the national Goverizment Gazette, financial statistics and aggregations concerning aIl spheres of government.
Delegations by National Treasury
10. (1) The Minister may— 20 (a) in writing delegate any of the powers entrusted to the National Treasury in
terms of this Act, to the head of a department forming part of the National Treasury, or instruct that head of department to perform any of the duties assigned to the National Treasury in terms of this Act.
(2) A delegation, instruction or request in terms of subsection (1) to the head of a 25 department forming part of the National Treasury—
(a) is subject to any limitations or conditions that the Minister may impose; (b) may authorise that head, in the case of subsection (l)(a)—
(i) to sub-delegate, in writing, the delegated power to another National Treasury official, or to the holder of a specific post in the National 30 Treasury, or to the accounting officer of a constitutional institution or a department, or to the accounting authority for a public entity; or
(ii) to instruct another National Treasury official, or the holder of a specific post in the National Treasury, or the accounting officer for a constitu- tional institution or a department, or the accounting authority for a public 35 entity, to perform the assigned duty; and
(d) does not divest the Minister of the responsibility concerning the exercise of the delegated power or the performance of [he assigned duty.
(3) The Minister may confirm, vary or revoke an> decision taken by the head of a department forming part of the National Treasury, as a result of a delegation, instruction 40 or request in terms of subsection (1)(a), or by a treasury otTicial or accounting officer or accounting authority as a result of an authorisation in terms of subsection (2)(b), subject to any rights that may have become vested as a consequence of the decision.
Part 2: Natio~tal Revenue FuItd
Control of National Revenue Fund 45
11. (1) The National Treasury is in charge of the National Revenue Fund and must enforce compliance with the provisions of section 213 of the Constitution, namely that—
)\ct K(). 1.1999 P[”B[. [c Fr\’,4NcE NtANAGl;NlENT.AcT. 1999
(a) ail money received by the national government must be paid into the Fund. except money reasonably excluded by this Act or another Act of Parliament: and
(b) no money may be withdrawn from the Fund except— (i) in terms of an appropriation by an Act of Parliament; or
(ii) as a direct charge against the Fund, subject to section 15(1 )(a)(ii). (2) Draft legislation that provides for a withdrawal from the National Revenue Fund
as a direct charge against the Fund, may be introduced in Parliament only after the Minister has been consulted and has consented to the direct charge.
(3) Money that must be paid into the National Revenue Fund is paid into the Fund by depositin& it into a bank account of the Fund in accordance with any requirements that may be prescribed.
(4) The National Treasury ~ust establish appropriate and effective cash management and banking arrangements for the National Revenue Fund.
(5) The National Treasury must ensure that there is at all times suficient money in the National Revenue Fund.
Deposits and withdrawals by South African Revenue Services in.Revenue Funds
12. (1) The South African Revenue Services must promptly deposit into a Revenue Fund all taxes, levies, duties, fees and other moneys collected by it for that Revenue Fund, in accordance with a framework determined by the National Treasury.
(2) The South African Revenue Services may, despite section 15(1), withdraw money from the National Revenue Fund—
(a) to refund any tax, levy or duty credits or any other charges in connection with taxes, levies or duties;
(b) to make other refunds approved by the National Treasury; or (c) to transfer to a member of the South African Customs Union any money
collected on its behalf. (3) The National Treasury must promptly transfer all taxes, levies, duties, fees and
other moneys collected by the South African Revenue Services for a province and deposited into the National Revenue Fund, to that province’s Provincial Revenue Fund.
(4) Withdrawals in terms of subsection (2) or (3) are direct charges against the National Revenue Fund.
Deposits into National Revenue Fund
13. (1) All money received by the national government must be paid into the National Revenue Fund, except money received by—
(a) (b) (c) (d) (e)
(f)
(s)
Parliament; - -
a national public entity: the South African Reserve Bank; the Auditor-General: the national government from donor agencies which in terms of ’legislation or the agreement with the donor, must be paid to the Reconstruction and Development Programme Fund; a national department— (i) operating a trading entity, if the money is received in the ordinary course
of operating the trading entity; (ii) in trust for a specific person or category of persons or for a specific
purpose; (iii) from another department to render an agency service for that department;
or (iv) if the money is of a kind described in Schedule 4; or a constitutional institution— (i) in tmst for a specific person or category of persons or for a specific
purpose; or (ii) if the money is of a kind described in Schedule 4.
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(2) The exclusion in subsection (1 )(b) does not apply to a national public entity which is not listed in Schedule 2 or 3 but which in terms of section 47 is required to be listed.
(3] Draft ]egisIation that excludes money from payment into the National Revenue Fund may be introduced in Parliament only after the Minister has been consulted on the 5 reasonableness of the exclusion and has consented to the exclusion.
(4) Any legislation inconsistent with subsection (1) is of no force and effect to the extent of the inconsistency.
(5) Money received by Parliament, a national public entity listed in Schedule 2 or 3, the South African Reserve Bank or the Auditor-General must be paid into a bank account 10 opened by the institution concerned.
Wthdrawal of exclusions
14. (1) The National Treasury may withdraw, from a date determined by it, any exclusion granted to a national department, a constitutional institution or a national public entity in terms of section 13(l), either with regard to all money or with regard to 15 money of a specific kind received by that department, constitutional institution or public entity, if—
(a) the exclusion is not reasonable within the context of section 213 of the Constitution; or
(b) the National Treasury regards the withdrawal of the exclusion to be necessary 20 for transparency or more effective and accountable financial management.
(2) The exclusion in terms of section 13(1) of the following public entities may not be withdrawn:
(a) A national government business enterprise which is a company and in which the state is not the sole shareholder; and 25
(b) the national public entities listed in Schedule 2. (3) From the date on which the withdrawal of an exclusion in terms of subsection (1)
takes effect until the end of the relevant financial year, the National Treasury may transfer money from the National Revenue Fund, as a direct charge against the Fund, to the national department or public entity affected by the withdrawal, provided that the 30 amount of the transfer does not exceed the amount that would otherwise have been excluded from payment into the Fund.
(4) The Minister must promptly inform Parliament of any withdrawal of an exclusion in terms of subsection (1).
Withdrawals and investments from National Revenue Fund 35
15. (1) Only the National Treasury may withdraw money from the National Revenue Fund, and may do so only—
(a) to provide funds that have been authorised— (i) in terms of an appropriation by an Act of Parliament; or
(ii) as a direct charge against the National Revenue Fund provided for in the 40 Constitution or this Act, or in any other Act of Parliament provided the direct charge in such a case is listed in Schedule 5;
(b) to refund money invested by a province in the National Revenue Fund; or (c) to refund money incorrectly paid into, or which is not due to, the National
Revenue Fund. 45 (2) A payment in terms of subsection (1 )(b) or (c) is a direct charge against the
National Revenue Fund. (3) (a) The Nationrd Treasury may invest temporarily, in the Republic or elsewhere,
money in the National Revenue Fund that is not immediately needed. (b) When money in the National Revenue Fund is invested, the investment, including 50 .
interest earned, is regarded as part of the National Revenue Fund.
Use of funds in emergency situations
16. (1) The Minister may authotise the use of funds from the Nationrd Revenue Fund
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to defray expenditure of an exceptional nature which is currently not provided for and which cannot, without serious prejudice to the public interest, be postponed to a future parliamentary appropriation of funds.
(2) The combined amount of any authorisations in terms of subsection ( 1), may not exceed two per cent of the total amount appropriated in the annual national budget for 5 the current financial year.
(3) An amount authorised in terms of subsection (1) is a direct charge against the National Revenue Fund.
(4) An amount authorised in terms of subsection (1) must— (a) be reported to Parliament and the Auditor-General within 14 days, or if the 10
funds are authorised for the deployment of the security services, within a period determined by the President; and
(b) be attributed to a vote. (5) A report to Parliament in terms of subsection (4)(a) must be submitted to the
National Assembly for tabling in the Assembly and made public. 15 (6) Expenditure in terms of subsection (1) must be included either in the next
adjustments budget for the financial year in which the expenditure is authorised or in other appropriation legislation tabled in the National Assembly within 120 days of the Minister authorizing the expenditure, whichever is the sooner.
CHAPTER 4 20
NATIONAL BUDGETS
Annual appropriations
26. Parliament must appropriate money for each financial year for the requirements of the state.
National annual budgets 25
27. (1) The Minister must table the annual budget for a financial year in the National Assembly before the start of that financial year or, in exceptional circumstances, on a date as soon as possible after the start of that financial year, as the Minister may determine.
(3) An annual budget must be in accordance with a format as may be prescribed, and 30 must at least contain—
(a) estimates of all revenue expected to be raised during the financial year to which the budget relates;
(b) estimates of current expenditure for that financial year per vote and per main division within the vote; 35
(c) estimates of interest and debt servicing charges, and any repayments on loans; (d) estimates of capital expenditure per vote and per main division within a vote
for that financial year and the projected financial implications of that expenditure for future financial years;
(e) estimates of revenue excluded in terms of section 13(1) from the Revenue 40 Fund for that financial year;
~) estimates of all direct charges against the Revenue Fund and standing appropriations for that financial year;
(g) proposals for financing any anticipated deficit for that financial year; (/1) an indication of intentions regarding bomowing and other forms of public 45
liability that will increase public debt during that financial year and future financial years;
(i) the projected— (i) revenue for the previous financial year;
(ii) expenditure per vote, and per main division within the vote, for the 50 previous financial year; and
(iii) borrowing for the previous financial year; and (j) any other information as may be prescribed, including any multi-year budget
information. (4) When the annual budget is in~oduced in the National Assembly, the accounting 55
officer for each department must submit to Parliament measurable objectives for each
24 No. 19X14 GO\ ’ERNMENT GAZEmE. 2 MARCH 1999
Act No. 1.1999 PL-B[.IC FISANCE MANAGEMENT ACT, 1999
main division within the department’s vote. The treasury may co-ordinate these submissions and consolidate them in one document.
Multi-year budget projections
28. (1) The Minister must annually table in the National Assembly a multi-year budget projection of— 5
(a) the estimated revenue expected to be raised during each year of the multi-year period; and
(b) the estimated expenditure expected to be incurred per vote during each year of the multi-year period, differentiating between capital and current expenditure.
(2) A multi-year budget projection tabled by the Minister must contain the 10 Minister’s key macro-economic projections.
Expenditure before annual budget is passed
29. (1) If an annual budget is not passed before the start of the financial year to which it relates, funds may be withdrawn in accordance with this section from the Revenue Fund for the services of the state during that financial year as direct charges 15 against the Fund until the budget is passed.
(2) Funds withdrawn from a Revenue Fund in terms of subsection (1 )— (a) may be utilised only for services for which funds were appropriated in the
previous annual budget or adjustments budget; and (b) may not— 20
(i) during the first four months of that financial year, exceed 45 per cent of the total amount appropriated in the previous annual budget;
(ii) during each of the following months, exceed 10 per cent of the total amount appropriated in the previous annual budget; and
(iii) in aggregate, exceed the total amount appropriated in the previous annual 25 budget.
(3) The funds provided for in subsection(1) are not additional to funds appropriated for the relevant financial year, and any funds withdrawn in terms of that subsection must be regarded as forming part of the funds appropriated in the annual budget for that financial year. 30
National adjustment budgets
30. (1) The Minister may table an adjustments budget in the National Assembly as and when necessary.
(2) A national adjustments budget may only provide for— (a) adjustments required due to significant and unforeseeable economic and 35
financial events affecting the fiscal targets set by the annual budget; (b) unforeseeable and unavoidable expenditure recommended by the national
executive or any committee of Cabinet members to whom this task has been assigned ;
(c) any expenditure in terms of section 16; 40 (d) money to be appropriated for expenditure already announced by the Minister
during the tabling of the annual budget; (e) tie shifting of funds between and within votes or to follow the transfer of
functions in terms of section 42; ~) the utilisation of savings under a main division of a vote for the defrayment of 45
excess expenditure under mother main division of the same vote in terms of section 43; and
(g) the roll-over of unswnt funds from the preceding financial year.
Publishing of reports on state of budget
32. (I) Within 30 days tier the end of each month, tie Nation~ Treasuw must 50 publish in the national Government Gazette a statement of actual revenue and expenditure with regmd to tie National Revenue Fund.
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}ict N{). 1, 199Y PUBLIC FIN.ASCE M.4NAGEhlENT ACT. 199Y
(3) The statement must specify the following amounts and compare those amounts in each instance with the corresponding budgeted amounts for the relevant financial year:
(a) The actual revenue for the relevant period, and for the financial year up to the end of that period: 5
(b) the actual expenditure per vote (distinguishing between capital and current expenditure) for that period, and for the financial year up to the end of that period; and
(c) actual borrowings for that period, and for the financial year up to the end of that period. 10
(4) The National Treasury may deterrnine— (a) the format of the statement of revenue and expenditure; and (b) any other detail the statement must contain.
Withholding of appropriated funds
33. The treasury— 15 (a) may withhold from a department any remaining funds appropriated for a
specific function if that function is transferred to another department or any other institution; and
(b) must allocate those remaining funds to that other department or institution.
Unauthorised expenditure 20
34. (1) Unauthorised expenditure does not become a charge against a Revenue Fund except when—
(a) the expenditure is an overspending of a vote and Parliament approves, as a direct charge against the Revenue Fund, an additional amount for that vote which covers the overspending; or 25
(b) the expenditure is unauthorised for another reason and Parliament authorises the expenditure as a direct charge against the Revenue Fund.
(2) If Parliament does not approve in terms of subsection ( l)(a) an additional amount for the amount of any overspending, that amount becomes a charge against the funds allocated for the following or future financial years under the relevant vote. 30
CHAPTER 5
DEPARTMENTS AND CONSTITUTIONAL INSTITUTIONS
Part 1: Appointment of accounting oflcers
Accounting officers
36. (1) Every department and every constitutional institution must have an 35 accounting officer.
(2) Subject to subsection (3)— (a) the head of a department must be the accounting officer for the department;
and (b) the chief executive officer of a constitutional institution must be the 40
accounting officer for that institution. (3) The treasury may, in exceptional circumstances, approve or instruct in writing
that a person other than the person mentioned in subsection (2) be the accounting officer for—
(a) a department or a constitutional institution; or 45 (b) a trading entity within a department.
(4) The treasu~ may at any time withdraw in writing an approval or instruction in te~s of subsection (3).
(5) The employment contract of an accounting officer for a department, trading entity or constitutional institution must be in writing and, where possible, include 50 Performance standards. The provisions of sections 38 to 42, as may be appropriate, are regarded as forming part of each such contract.
/icl N{). 1 .1999 PL” BLIC FIS,\SCE N1.4X.AGEMENT ACT. IY99
Acting accounting officers
37. When an accounting officer is absent or otherwise unable to perform the functions of accounting officer, or during a ~acancy. the functions of accounting officer must be performed by the official acting in the place of that accounting officer.
Part 2: Respo~tsibilities of accoutlti.Jlg oficers
General responsibilities of accounting officers
38. ( 1 ) The accounting officer for a department, trading entity or constitutional institution—
(a) must ensure that that department. trading entity or constitutional institution has and maintains- (i) effective, efficient and transparent systems of financial and risk
management and internal control; (ii) a system of internal audit under the control and direction of an audit
committee complying with and operating in accordance with regulations and instructions prescribed in terms of sections 76 and 77;
(iii) an appropriate procurement and provisioning system which is fair, equitable. transparent, competitive and cost-effective;
(iv) a system for properly evaluating all major capital projects prior to a final decision on the project;
(b) is responsible for the effective, efficient, economical and transparent use of the resources of the department, trading entity or constitutional institution;
(c) must take effective and appropriate steps t~ (i) collect all money due to the department, trading entity or constitutional
institution; (ii) prevent unauthorised, irregulas and fruitless and wasteful expenditure
and losses resulting from criminal conduct; and (iii) manage available working capital efficiently and economically;
(d)
(e)
(f)
(g)
(11)
(;)
(1)
is responsible for the management, including the safeguarding and the maintenance of the assets, and for the management of the liabilities, of the department, trading entity or constitutional institution; must comply with any tax, levy, duty, pension and audit commitments as may be required by legislation; must settle all contractual obligations and pay all money owing, including intergovernmental claims, within the prescribed or agreed period; on discovery of any unauthorised, irregulw or fruitless and wasteful expenditure, must immediately report, in writing, particul~s of the expendi- ture to the treasury and in the case of irregular expenditure involving the procurement of goods or services, also to the relevant tender board; must take effective and appropriate disciplinary steps against any official in the service of the department, trading entity or constitutional institution who— (i) contravenes or fails to comply with a provision of this Act;
(ii) commits an act which undermines the financial management and internal control system of the department, trading entity or constitutional institution; or
(iii) m~es or permits an unauthorised expenditure, irregul~ expenditure or fruitless and wasteful expenditure;
when transferring funds in te~s of the annual Division of Revenue Act, must ensure that the provisions of that Act are complied with; before transferring any funds (other than grants in terms of the annual Division of Revenue Act or to a constitutional institution) to an entity within or outside government, must obtain a written assurance from the entity that that entity implements effective, efficient and transparent financial manage-
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Act No. 1.1999 PL”BLIC FIS.\NCE hl.4NAGEMENTACT. i99~)
ment and internal control systems, or, if such written assurance is not or cannot be gi~en. render the transfer of the funds subject to conditions and remedial measures requiring the entity to establish and implement effective, efficient and transparent financial management and internal control systems;
(k) must enforce compliance with any prescribed conditions if the department, trading entity or constitutional institution gives financial assistance to any entity or person:
(/) must take into account all relevant financial considerations, including issues of propriety, regularity and value for money, when policy proposals affecting the accounting officer’s responsibilities are considered, and when necessary, bring those considerations to the attention of the responsible executive authority;
(~r~) must promptly consult and seek the prior written consent of the National Treasury on any new entity which the department or constitutional institution intends to establish or in the establishment of which it took the initiative; and
(/7) must comply, and ensure compliance by the department, trading entity or constitutional institution, with the provisions of this Act.
(2) An accounting officer may not commit a department, trading entity or constitutional institution to any liability for which money has not been appropriated.
Accounting officers’ responsibilities relating to budgetiry control
39. (1) The accounting officer for a department is responsible for ensuring that— (u) expenditure of that department is in accordance with the vote of the
department and the main divisions within the vote; and (b) effective and appropriate steps are taken to prevent unauthorised expenditure.
(2) An accounting officer, for the purposes of subsection (l), must— (a) take effective and appropriate steps to prevent any overspending of the vote of
the department or a main division within the vote; (b) report to the executive authority and the treasury any impending
(i) under collection of revenue due; (ii) shortfalls in budgeted revenue; and
(iii) overspending of the department’s vote or a main division within the vote; and
(c) comply with any remedial measures imposed by the treasury in terms of this Act to prevent overspending of the vote or a main division within the vote.
Accounting officers’ reporting responsibilities
40. (1) The accounting officer for a department, trading entity or constitutional institution—
(a) must keep full and proper records of the financial affairs of the department, trading entity or constitutional institution in accordance with any prescribed norms and standards;
(b) must prepare financial statements for each financial year in accordance with generally recognized accounting practice;
(c) must submit those financial statements within two months after the end of the financial year tp (i) the Auditor-General for auditing; and
(ii) the treasury to enable that treasu~ to prepare consolidated financial statements in terms of section 8;
(d) must submit within five months of the end of a financial year to the treasury and, in the case of a dep~ment or trading entity, also to the executive authority responsible for that department or trading entity— (i) an ~nual report on the activities of that department, trading entity or
constitutional institution during that financial year;
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Act N{). 1.1999 PL”BLIC FISANCE hfANAGEMENT ACT. 1999
(ii) the firtancial statements for that financial year after those statements have been audited: and
(iii) the Auditor-Generals report on those statements; (e) must, in the case of a constitutional institution, submit to Parliament that
institution’s annual report and financial statements referred to in paragraph 5 (d), and the Auditor-General’s report on those statements, within one month after the accounting officer received the Auditor-General’s audit report; and
V) is responsible for the submission by the department or constitutional institution of all reports, returns, notices and other information to Parliament, an executive authority, the treasury or the Auditor-General, as may be required 10 by this Act.
(2) The Auditor-General must audit the financial statements referred to in subsection (1)(b) and submit an audit report on those statements to the accounting officer within two months of receipt of the statements.
(3) The annual report and audited financial statements referred to in subsection (l) 15 (d) must—
(a) fairly present the state of affairs of the department, trading entity or constitutional institution, its business, its financial results, its performance against predetermined objectives and its financial position as at the end of the financial year concerned; and 20
(b) include particulars of— (i) any material losses through criminal conduct, and any unauthorised
expenditure, irregular expenditure and fruitless and wasteful expendi- ture, that occurred during the financial year;
(ii) any criminal or disciplinary steps t~en as a result of such losses, 25 unauthorised expenditure, irregular expenditure and fruitless and waste- ful expenditure;
(iii) any material losses recovered or written off and (iv) any other matters that may be prescribed.
(4) The accounting officer of a department must— 30 (a) each year before the beginning of a financial year provide the treasury in the
prescribed format with a bre&down per month of the anticipated revenue and expenditure of that department for that financial year;
(b) each month submit information in the prescribed format on actual revenue and expenditure for the preceding month and the amounts anticipated for that 35 month in terms of paragraph (a); and
(c) within 15 days of the end of each month submit to the treasury and the executive authority responsible for that department— (i) the information for that month;
(ii) a projection of expected expenditure and revenue collection for the 40 remainder of the current financial year; and
(iii) when necessary, an explanation of any material variances and a summary of the steps that are tken to ensure that the projected expenditure and revenue remain within budget.
(5) If an accounting officer is unable to comply with any of the responsibilities 45 determined for accounting officers in this Part, the accounting officer must promptly report the inability, together with reasons, to the relevant executive authority and treasury.
Information to be submitted by accounting officers
41, An accounting officer for a department, trading entity or constitutional institution 50 must submit to the treasury or the Auditor-General such information, returns,
documents, explanations and motivations as maybe prescribed or as the treasury or the Auditor-General may require.
Accounting officers’ responsibilities when assets and liabilities are transferred
42. (1) When assets or liabilities of a deptiment are transferred to another department 55 or other institution in terms of legislation or following a reorganisation of functions, the accounting officer for the transferring department must—
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.tct No. 1 .1999 PL’BI.IC FIS.AXCE hfAN,\GE,MENT .ACT. 1099
SCHEDULE 1
CONSTITUTIONAL INSTITUTIONS
1. 2. 3.
4. 5. 6. 7. 8. 9.
10,
The Public Protector. The Human Rights Commission. The Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities. ‘ The Commission for Gender Equality. The Independent Electoral Commission. The Independent Broadcasting Authority. The Financial and Fiscal Commission. The Commission on the Remuneration of Persons Holding Public Office. The Pan South African Language Board. The Municipal Demarcation Board.
SCHEDULE2
NIAJOR PUBLIC ENTITIES
1. 2. 3. 4, 5 6: 7. 8. 9.
10. 11, 12. 13. 14. 15. 16. 17. 18. 19. 20.
Air Tmffic and Navigation Services Company Ai~orts Company Alexander Bay Development Corporation Armaments Corporation of South Africa Atomic Energy Corporation of South Africa Limited Centrdl Energy Fund DENEL Development Bank of Southern Africa ESKOM Independent Development Trust Industrial Development Coloration of South Africa Limited Land and Agricultural Bank of South Africa SA Abattoir Corporation SA Broadcasting Commission SA Forestry Company Limited SA Post Ofice Limited Telkom SA Limited Transnet Limited Trans-Caledon Tunnel Authority Any subsidiary or entity under the ownership control of the above public entities
/(1 ..(,. If’.,+
,\ct N{). 1. 1999 P1”BLIC FIS.+SCE \l,\S.4GEMENT ,4 Cr. 19Y9
SCHEDULE3
OTHER PUBLIC ENTITIES
Part A: National Public Entities
1. 7-. 3 4. 5. 6. 7. 8. 9.
10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42 43. 44. 45. 46. 47.
Accounting Standards Board Agricultural Credi[ Board Agricultural Reseach Council Air Services LicensinE Council Board on Tariffs and Trade Competition Board Certification Council for Technikon Education Commission for Conciliation, Mediation & Arbitration Compensation Board Council for Geoscience Council for Mineral Technology (Mintek) Council for Nuclear Safety Council for Scientific and Industrial Research Financial Services Board Human Sciences Research Council Judicial Services Commission Legal Aid Board National Agriculture Marketing Council National Economic, Development and Labour Council National Electricity Regulator National Film Board National Housing Bowd National Housing Finance Co~oration National Monuments Council National Parks Board National Road Fund National Small Business Council National Youth Commission Road Accident Fund SA Bureau of Standards SA Certification Council SA Civil Aviation Authority SA Housing Development Board SA Housing Fund SA Housing Trust Limited SA Medical Research Council SA Qualifications Authority SA Revenue Service SA Road Board SA Road Safety Council SA Telecommunications Regulatory Authority SA Tourism Board State Information Technology Agency Unemployment Insurance Fund Wage Board Water Research Commission Any subsidiary or entity under the ownership control of the above public entities
Part B: National Government Business Enterprises
1. Albaniekus Waterraad 2. Bala-Bala Farms (Pty) Ltd 3. Bloem Water 4. Bosveld Waterraad 5. Goudveld Water 6. Iniala Farms (Pty) Ltd
(;()\ERNMF,NT GAZETTF;. ~ NfAR~H I ~~’)
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,\~t so. 1.1999 PL”BLIC FISANCE 3!.ANAGEF4ENT ACT. 1999
7. Kal;~hari-Oos \Fatemaad 8. Kalahari-Wes \Fatemaad 9. Karos-Geelkoppen Watemaad
10. Khula Enterprises Il. Lanok (ptY) ‘td 12. MagalieS Water
13. Mhlathuze W a t e r 14. Mjindi Farming (Pty) Ltd 15. Mpendle-Ntambanana Agricultural Company (Pty) Ltd 16. Namakwa Water 17. Ncera Farms (Pty) Ltd 18. Noord Transvaal Water / Meetse 19. Ntsika Ente~rises 20. Overberg Walter 21. pelladrift Water
22. Phalaborwa Water 23. Rand Water Board 24. SA Rail Commuter Corporation Limited 25. Umgeni Water Bowd 26. Any subsidiary or entity under the ownership control of the above public
entitieS
Act No. 1, 1999 PIBLIC FI\.ANCE h14NAGEMENT ACT. 19QC)
SCHEDULE 4
EXCLUSIONS FROM REVENUE FUNDS
(In terms of section 13(l)(g))
1. SA Schools Act (covering school fees)
SCHEDULE 5
DIRECT CHARGES AGAINST NATIONAL REVENUE FUND
Payments in terms of the following Acts: 1. Remuneration of Public Office Bearers Act, 1998 (Act No. 20 of 1998) (Covering
the President’s salary and the salaries of members of Parliament sections 2(7) and 3(7));
2. Remuneration and Allowances of Deputy Presidents, Ministers and Deputy Ministers Act, 1994 (Act 53 of 1994) (Covering the salary of the Deputy President section 4(a));
3. Judges’ Remuneration and Conditions of Employment Act, 1989 (Act 88 of 1989) (Covering salaries and allowances of Judges and Judges seconded to governments of other countries in terms of section 2).
,ict No. 1.1999 PVBLIC FfNANCE NIANAGEMENT .ACT. 1999
SCHEDULE 6
REPEAL OF LEGISLATION
(Section 87)
No. and year of act Short title Extent of repeal
(a) Act No. 66 of 1975 Exchequer Act. 1975 The whole. except sections 28, 29. 30
Act No. 106 of 1976 Financial Arrangements with the The whole Transkei Act, 1976
Act No. 93 of 1977 Financial Arrangements with The whole Boputhtastwana Act. 1977
Act No. 105 of 1979 Flrrancial Arrangements with Vends The whole Act. 1979
Proclamation No. R.85 of South West Africa Constitution Act, Part 3 1968 1968 (Act No. 39 of 1968)
Act No. 67 of 1980 Railways and Harbours Acts Section 19 Amendment Act, 1980
Act No. 29 of 1981 Railways and Harbours Acts Section 21 Amendment Act, 1981
Act No. l180f 1981 Financial Arrangements with Clskei The Whole Act, 1981
Act No. 100 of 1984 Exchequer and Audit Amendment The whole Act. 1984
Act No. 9 of 1989 Legal Succession of the South Afri- Schedule 2 Part 6 of the act insofar can Transpon Services Act, 1989 as it relates to the Exchequer Act,
1975
Act No. 120 of 1991 Finance Act, 1991 Sections 14, 15 and 16
Act No. 96 of 1992 Parr Appropriation Acts Abolition The whole Act, 1992
Act No. 69 of 1993 Exchequre Amendment Act, 1993 The whole
Act No. t 23 of 1993 Finance Act. 1993 The whole
Act No. 142 of 1993 Exchequer Second Amendment Act, The whole 1993
Act No. 182 of 1993 Exchequer Third Amendment Act, The whole 1993
Act No. 41 of 1994 Finance Act, 1994 Sec~ions 17 and 18
(b) Act No. 93 of 1992 Reporting by Public Entities Act, The whole 1992
(C) Act No. 66 of 1975 Exchequer and Audit Act, 1975 The whole insofar as it is in force in the area of the former Republic of Transkei
Act No. 102 of 1976 Finance Act. 1976 Sections 23, 24 and 25 insofar as it is in force in the area of the former Republic of Transkei
(d) Act No. 29 oi 1992 Exchequer ACI, 1992 The whole (Bophuthatswana) Act No. 16 of 1993 Exchequer Amendment Act, 1993 The whole (Bophuthatswana) (e) Act No, 66 Oi 1975 Exchequer and Audit Act, 1975 The whole insofar as it is in force
in the mea of the former Republic oi Vends
Act No. I I 1 of 1977 Finance Act, 1977 Sections 9, 10 and } 1 insofar as it is in force in the area of the former Republic oi Vends
Acl No, 94 of 1978 Finance Act, 1978 Sections 12, 13 and 14 insofar as it is in force in the area of the former Republic of Vends
.,, l.)>,- tiOVk KNMLN 1 LT.ALLI lb. J MAKLH IYVY
,\cf No. 1, 1999 PLBLIC ~NANCE MANAGEMENT ACT, 1999
No. and year of act Short title Extent of repeal Proclamation No. R.85 of Exchequer and Audit Proclamation SectIons 16 and 17 insofar as it is
I I in force in the area of the former I I Republic of Vends
ACI No. 21 of 1983 (Vends) Exchequer and Audit Amendment The whole \ Act, 1983 I
Act No. 18 of 1987 (Vends) Exchequer and Audit Amendment I The whole \ Act, 1987
Act No. 28 of 1989 (Vends) Exchequer and Audit Amendment I The whole Act, 1989
Proclamation No. 25 of 1993 Exchequer and Audit Amendment The whole (Vends) Act, 1993
(f) Act No. 28 of 1985 Exchequer and Audit Act, 1985 The whole (Ciskei)
L