The Public Finance Management Act: Inspiration for Financial Governance

1
The Public Finance Management Act
Inspiration for Financial Governance

• Presented by
• D. R. Myrick

2
Introduction

• Corporate Governance v. Public Governance
• Directors Responsibilities
• Risk Management
• Internal Auditing
• Triple Bottom Line
• Accounting Auditing
• Enforcement
• Public Governance Leading to Financial Governance

3
Financial Governance

• The World Banks Five (5) Themes
• Legal Institutions for Market Economies
• Administrative and Civil Service Reform
• Public Finance
• Regional and Sub-national Decentralisation
• Anticorruption
• http//web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EX
  TPUBLICSECTORANDGOVERNANCE/0,,menuPK286310pagePK
  149018piPK149093theSitePK286305,00.html

4
Financial Malfeasance

• Fiscal Risks Schick (2002)
• How can Financial Transgressions Be Dealt With?
• Look to the PFMA To Devise Code for Financial
  Governance.

5
Relevant Sections of PFMA

• Chapt. 7 Diffuse Power Exec. Authority
• Section 27 (4) Spend to Meet Policy Objectives
• Gazette 29490 Match Outcomes Objectives
• Sections 36(2)(a) (b) Comparative Analysis
• Section 55(b) Report to Assess Performance
• Chapter 10 Enforcement

6
ConclusionCode of Financial Governance

• Government departments should review
  structures for financial transactions and
  wherever possible diffuse associated power to
  effect government spending. The power to effect
  a transaction should not rest with one
  individual. Moreover, on those occasions when
  spending is eminent, there should be assurance
  that spending meets aligned policy objectives.
  Further to that end, desired outcomes should be
  matched against outputs. Indeed, spending should
  be targeted and purposeful. Reporting and
  comparison of budgeted amounts against actual
  spending should be used as a deterrence to
  corruption. With regard for enforcement, when
  all else fails there should be no hesitation to
  prosecute.