This practice note replaces Practise Note 1 of 2010/11 dated 3 February 2011.
Chapter 5 of the Public Finance Management Act 1 of 1999 (PFMA) prescribes the responsibilities of Accounting Officers.
Actual revenue and expenditure for the preceding month; Anticipated revenue and expenditure for the current month; A projection of expected expenditure and revenue collection for the remainder of the current financial year; and When necessary, an explanation of any material variances, and a summary of the steps that are taken to ensure that the projected expenditure and revenue remain within budget.
Section 40 (1) (a) requires Accounting Officers to maintain full and proper records of the financial affairs of the department in accordance with any prescribed norms and standards. To ensure the completeness and accuracy of the information supplied in terms of section 40 (4) (c), all Accounting Officers must certify on a monthly basis, before the closure of the accounting month that they have complied with the minimum financial performance indicators in Annexure B.
In addition, compliance to Paragraph 17.
3.2 That in all exceptional cases, where it is necessary to account for revenue and expenditure transactions in a control account because the classification has not been resolved, that the Accounting Officer, or his/her designate, ensured that the requirements of Annexure B regarding items in control/suspense accounts have been complied with.
The Chief Financial Officer must review and approve (by signing) all reconciliations for the reporting month to ensure that unauthorized transactions are detected, and dishonored cheques and long outstanding amounts are followed up and cleared. By signing the reconciliations, the Chief Financial Officer confirms concurrence and approval thereof.
(See Annexure A).
The minimum financial management performance indicators that would assist in the completion of the certificate is contained in Annexure B. The certificate must be completed and signed by the Chief Financial Officer and Accounting Officer on a monthly basis. Each certificate must be submitted to the relevant treasury.
The month-end closure dates for the 2011/12 financial year are reflected in Annexure C. National and Provincial departments must align these dates to their departmental processes in order to ensure that the month-end closure can occur timeously on or before these dates. National Treasury will force close any general ledgers that are still open by the closing dates in Annexure C.
All National and Provincial departments must ensure that bank reconciliations are performed on a daily basis.
Annexure D lists the final dates of the Paymaster General Account (PMG) closure and availability of Bank statements. This information must be used in conjunction with the month-end closure dates.
All Provincial Departments are to follow the reporting requirements as determined by the Provincial Treasury and reports must be submitted no later than the dates in Annexure C.
The amendments to the Bill of Exchange Act, regarding non transferable cheques require all National/Provincial departments to take care of their warrant voucher/cheques, to scrutinise statements to detect unauthorised debits and to ensure timeous preparation and review of bank reconciliations. This implies that all enquiries must be sent to the bank immediately on a daily basis. Please note that as a result of the amendments, banks can no longer be held liable for forged or altered cheques, where the forgery or alterations were facilitated as a result of negligence by the department.
If an Accounting Officer is unable to comply with any of the minimum prescribed financial performance indicators in Annexure B, s/he must promptly report the non compliance and reasons thereof to the relevant treasury and provide action plans with timeframes to address the non-compliance.
Practice Note 5 of 2009 is hereby repealed. Reporting requirements in terms of the IFS will be issued annually.
Accountability and governance within the public sector needs to be strengthened.
Therefore IFS was introduced in the 2009/10 financial year. Both National and Provincial Departments were required to complete the IFS for the period ended 30 September 2009. The IFS template had to be submitted to the relevant treasury on or before 31 October 2009.
8.3.4.4. 31 March 2012 8.3.5. The completed IFS template must be submitted to the relevant treasury within 30 days after the period ended.
The Accounting Officer will be required to complete and sign the letter confirming accuracy and completeness. This letter is attached as Annexure E.
National departments are required to submit their IFS to the respective Office of the Accountant-General representative allocated to them while provincial departments should submit their IFS to their respective Provincial Accountant-General. (See point 6 above for more details).
Guidance on completion of the IFS will be issued with the template on an annual basis.
The IFS template for 2010/11 will be issued by no later than 31 May 2011.
This Practice Note applies to all national and provincial departments. Failure to comply with this Practice Note shall be regarded as financial misconduct in terms of the Treasury Regulations.
Head Officials of Provincial Treasuries are requested to bring the contents of this Practice Note to the attention of accounting officers of their provincial departments.
11.A copy of this Practice Note will be forwarded to the Auditor-General to ensure its contents are included in their audit scope.
This Practice Note takes effect from 1 April 2011.
This Practice Note is issued in terms of Section 76(4)(g) of the PFMA.
Please attach reason/comments and action plans with the time frames to address non-compliance with the minimum financial management performance indicators reflected in Annexure B.
The Bank Reconciliation for all bank accounts for the reporting month has been done as at and copies are attached (Do not attach any other documentation).
All transactions are supported by authentic and verifiable source documents.
All deposits and receipts have been recorded in the General Ledger of the department and reconciled.
All departmental revenue has been paid timeously to the National Revenue Fund.
All Cheques/Warrant vouchers/Electronic fund transfer (EFT)/Bank credits have been recorded in the General Ledger of the department and the EFT control account reconciled.
The bank adjustment/exception account has been reconciled.
All Bank Reconciliations have been performed and reconciling items cleared.
All interfaces for the month have taken place and reconciled.
All journals have been recorded and authorised on the Financial System of the department.
All Inter-departmental balances and debts have been recorded, reconciled and paid within the prescribed or agreed period.
All staff debts have been recorded and reconciled.
All reporting requirements of Division of Revenue Act (DoRA) have been adhered to.
The Budget per the Estimates of National Expenditure (ENE) or adjusted ENE has been captured on the financial systems as per the Standard Chart of Account (SCOA) as prescribed in the ENE. The Budget on the financial system has been reconciled to the ENE or adjusted ENE.
13.1 All supporting documentation is readily available.
13.2 Monthly reconciliation of all control or suspense accounts is performed to confirmed and unconfirmed balances in the confirmation letters (issued and received) and available supporting documentation.
13.3 Amounts included in control or suspense accounts are cleared and correctly allocated to the relevant cost centres on a monthly basis.
13.4 Reports are provided to the Accounting Officer about uncleared items, and followed up on a monthly basis by the Chief Financial Officer.
MARCH 2012 - PRELIMINARY 2012/04/30 i The dates reflect close of business for that day. ii The dates are the latest possible closure date; however departments are encouraged to enhance their internal procedures to close earlier.
I hereby acknowledge that the interim financial report (IFR) of 2 , have been submitted to the relevant treasury3 as requested in Practice Note 5 of 2009.
the IFR have been prepared in accordance with modified cash basis of accounting and relevant guidelines specified / issued by the National Treasury.
the IFR is complete and accurate.
all amounts appearing on the IFR have been cast and cross-cast.
the IFR is free from material misstatements, including omissions; and accounting estimates are reasonable in the circumstances.
1 The letter should be addressed to national/provincial treasury.
2 Insert the name of the department.
3 Insert the relevant reference, for example for national and provincial treasury.