A draft Financial Management of Parliament Bill, 2005, as presented to the Speaker of the National Assembly by the Portfolio Committee on Finance, is hereby published for comment.
To regulate the financial management of Parliament in a manner consistent with its status in terms of the Constitution; to ensure that all revenue, expenditure, assets 5 and liabilities of Parliament are managed efficiently and effectively; to provide for the responsibilities of persons entrusted with financial management in Parliament; and to provide for matters connected therewith.
1999 (Act No.
In this Act, a word or expression derived from a word or expression defined in subsection (1) has a corresponding meaning unless the context indicates that another meaning is intended.
to establish norms and standards for the managing the financial affairs of Parliament and the provincial legislatures.
Provincial legislatures must adhere to the norms and standards for financial management set out in Schedule 1.
(1)The Executive Authority of Parliament is the Speaker of the National Assembly and the Chairperson of the National Council of Provinces, acting jointly.
The Executive Authority is accountable to Parliament for the sound financial management of Parliament.
Members of the Executive Authority must act in accordance with the code of ethics in Schedule 2.
This Act is administered under the control of the Executive Authority by the Secretary to Parliament who is the Accounting Officer of Parliament.
(2)The Accounting Officer is accountable to the Executive Authority for the financial management of Parliament.
unauthorised, irregular and fruitless and wasteful expenditure and other losses are prevented; and disciplinary or, when appropriate, criminal proceedings are instituted against any official who has allegedly committed an act of financial misconduct or an offence in terms of Chapter 10.
(1)The Executive Authority and the Accounting Officer must annually conclude a written performance agreement for the Accounting Officer.
provide for an annual assessment of the Accounting Officer's performance by the Executive Authority; and specify the consequences of sub-standard performance.
The provisions of this Act conferring responsibilities on the Accounting Officer are part of the performance agreement of an Accounting Officer.
The annual assessment of the Accounting Officer's performance must take cognisance of the audit report on the annual financial statements of Parliament.
the Deputy Secretary to Parliament; or if the post of Deputy Secretary is vacant, or the Deputy Secretary is unable to perform those functions, another official of Parliament designated in writing by the Executive Authority.
The Accounting Officer may delegate any powers or duties conferred on the Accounting Officer by this Act to an official of Parliament in accordance with a system of delegation.
maximise administrative and operational efficiency; and provide adequate checks and balances in the financial management of Parliament.
The Accounting Officer must regularly review delegations made in terms of subsection (1) and, if necessary, amend or withdraw any of those delegations.
may authorise that official to sub-delegate, in writing, the delegated power or duty to another official, or to the holder of a specific post in the administration of Parliament; and does not divest the Accounting Officer of responsibility for the exercise of the delegated power or the performance of the delegated duty.
that all revenue due to Parliament is collected; and that Parliament's assets and liabilities are managed effectively, and that assets are safeguarded and maintained to the extent necessary.
disclose all material facts which are available to that person or reasonablydiscoverable, and which in any way might influence any decision or action in terms of this Act; and seek to prevent any prejudice to the financial interests and good reputation of Parliament.
in the case of the Accounting Officer to the Executive Authority; and in the case of any other person, to the Accounting Officer.
may act in a way that is inconsistent with the Act; or may use their position or any confidential information obtained in the exercise of their responsibilities for personal gain or to benefit improperly themselves or any other person.
approve the strategic plan, annual performance plan and budget for submission to a joint committee of Parliament.
Within six months after a general election, by another date determined by Parliament, the Accounting Officer must prepare and present a strategic plan for Parliament's administration to the Executive Authority.
include multi-year projections of revenue and expenditure; and include performance measures and indicators for assessing the administra-tion's performance in implementing the strategic plan.
At least ten months prior to the start of the financial year, the Accounting Officer must prepare draft annual performance plan for Parliament and present it to the Executive Authority.
performance measures and indicators for assessing Parliament's performance in achieving the purposes of the projects.
At least ten months prior to the start of the financial year, the Accounting Officer must prepare a draft budget for Parliament and present it to the Executive Authority.
of the Public Finance Management Act.
the draft strategic plan of Parliament within ten working days of receiving it from the Accounting Officer; and the draft annual performance plan and draft budget at least one month before the draft budget must be submitted to the National Treasury.
These matters are dealt with in section 32 of 34.
submit the draft budget to the National Treasury by a date agreed to with the Minister of Finance; and represent Parliament in any discussions with the Minister of Finance on any aspect of Parliament's budget.
and may participate in the deliberations of the Committee at the request of the Committee.
The committee may require the Accounting Officer and any other official of Parliament to appear before it.
before the start of the financial year.
must be made by a national adjustments budget referred to in section 30 of the Public Finance Management Act.
If the national annual budget is not passed before the start of the financial year, funds may be withdrawn from the National Revenue Fund for the requirements of Parliament during that financial year as direct charges against the Fund until the budget is passed.
during each of the following months, exceed ten per cent of the total amount appropriated in the previous annual budget; and in aggregate, exceed the total amount appropriated in the previous annual budget.
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 budget for that financial year.
the expenditure is an overspending of a vote and Parliament appropriates an additional amount for that vote which covers the overspending; or the expenditure is unauthorised for another reason and Parliament authorises the expenditure as a direct charge against the National Revenue Fund.
Parliament must advise the National Treasury of any unauthorised expenditure that has been authorised in terms of subsection (1).
but does not appropriate an additional amount covering the amount of the unauthorised expenditure, the unauthorised expenditure becomes a charge against the funds of Parliament.
The Accounting Officer may use a saving in the total amount appropriated under a main division within Parliament's vote towards defraying excess expenditure under another main division within the vote, unless the Executive Authority directs otherwise.
The amount of a saving under a main division of Parliament's vote that may be used in terms of subsection (l), may not exceed eight per cent of the amount appropriated under that main division.
appropriated for capital expenditure in order to defray current expenditure; or that is a direct charge against the National Revenue Fund in order to supplement Parliament's appropriated funds.
The Executive Authority may make regulations or issue instructions in accordance with section 63 concerning the application of this section.
the approval of the Executive Authority; and reappropriation in the adjustments budget in terms of section 30 of the Public Finance Management Act.
savings in respect of funds that are a direct charge against the National Revenue Fund may not be rolled over.
unspent funds on payments for capital assets may be rolled over only to finalise projects or asset acquisitions still in progress.
savings on transfers and subsidies may not be rolled over for purposes other than originally appropriated.
savings on funds appropriated for personnel expenditure may not be rolled over.
a maximum of five per cent of Parliament's funds appropriated for goods and services may be rolled over.
The Executive Authority must submit information on the roll-over of unspent funds to the National Treasury on or before the last working day of April for inclusion in the appropriate national adjustments budget.
Funds that are a direct charge against the National Revenue Fund and that are unspent at the end of a financial year must be returned to the National Revenue Fund.
Appropriated funds that are unspent at the end of a financial year and are not rolled over to a subsequent financial year in accordance with section 20 must be returned to the National Revenue Fund.
to ensure efficient and effective banking and cash management; and for investing money not immediately required.
(2)The Accounting Officer is responsible for establishing systems and procedures for the effective implementation of the policy prescribed in terms of subsection (1).
a bank account into which all money received by Parliament must promptly be paid; and such other bank accounts as are necessary for the effective and efficient management of Parliament's funds.
with an institution not registered as a bank in terms of the Banks Act, 1990 (Act No. 94 of 1990);or otherwise than in the name of Parliament.
A bank account opened in terms of this section does not form part of the National Revenue Fund.
is accountable to the Executive Authority for Parliament's bank accounts; and must enforce compliance with section 25.
Only the Accounting Officer, or an official to whom that power has been delegated in terms of section 8, may withdraw money, or authorise the withdrawal of money, from any of Parliament's bank accounts.
A delegation in terms of subsection (1) must be in accordance with the policy made in terms of section 22.
to make other refunds approved by the Executive Authority; or cash management or investment purposes in accordance with the policy made in terms of section 22.
issue a guarantee, indemnity or security, or enter into any other similar transaction that binds or may bind it to any future financial commitment.
maintaining proper accounts and records of all debtors, including amounts 40 received in part payment; and if appropriate, instituting legal proceedings.
An Accounting Officer may settle or write off a debt only in accordance with a prescribed policy.
Interest must be charged on any debt owed to Parliament in accordance with a 45 prescribed policy.
using credit cards, fleet management cards or other credit facilities repayable within 30 days from the date of the statement.
The Executive Authority must, in consultation with the Minister of Finance, Aeterminea process-for requisitioning--funds-s--d.lat-provides for sound cash-flow 1 management.
Parliament maintains a system of internal control of assets and liabilities, including an asset and liabilities register, as may be prescribed.
Accounting Officer is responsible for managing the revenue of Parliament.
all revenue received by Parliament is reconciled at least on a weekly basis.
The Accounting Officer is responsible for managing the expenditure of Parliament.
directly to the person to whom it is due unless agreed otherwise or for good reason; and either electronically or by way of non-transferable cheques, but cash payments and payments by way of cash cheques may be made for exceptional reasons, and only up to a prescribed limit; all amounts owed by Parliament are paid within 30 days of receiving the relevant invoice or statement, unless agreed otherwise; and all financial accounts of Parliament are closed at the end of each month and reconciled with its records.
32.(1) Allocations for support for political parties represented in Parliament may be used only in accordance with a policy adopted by Parliament.
(2)Thirty days prior to the beginning of each financial year, each political party must submit to the Accounting Officer an expenditure plan approved by the caucus of the party, that conforms with the policy contemplated by sub-section (1).
Constituency funds transferred to political parties represented in Parliament may be used only in accordance with a policy adopted by Parliament.
obtain a written assurance from the party it has financial management systems that will enable it to account separately for the use of constituency funds; or if such an assurance is not or cannot be given, the Accounting Officer must render the transfer of the funds subject to conditions requiring the political party to establish and implement the required financial management systems.
(3)Twomonths afterthe end of the financial year, the each political party must submit to the Executive Authority and the Auditor-General financial statements in the pw:gcribed format reflecting the use of the constituency funds.
submit an audit report on those statements to the Executive Authority within two months of receiving them; and recover the audit costs from Parliament.
(5)Within five days of receiving an audit report, the Executive Authority must table it and the relevant financial statements in Parliament.
(6)Should a party not submit the financial statements to the Accounting Officer within two months after the end of a financial year, the party will forfeit one tenth of its constituency funds for each month or part thereof that the financial statements are late.
a written assurance from the entity that it implements effective, efficient and transparent financial management and internal control systems; or render the transfer subject to conditions and remedial measures requiring the entity to establish and implement effective, efficient and transparent financial management and internal control systems.
spending is in accordance with the approved budget; and revenue and expenditure are properly monitored.
Any directive by the Executive Authority to the Accounting Officer that has financial implications must be in writing.
(2)If implementation of a directive is likely to result in unauthorised expenditure, the Accounting Officer will be responsible for any resulting unauthorised expenditure, unless the Accounting Officer has informed the Executive Authority in writing of the likelihood of that unauthorised expenditure.
If the Executive Authority decides to proceed with the implementation of such a directive, the decision and the reasons for it, must be in writing, and the Accounting Officer must promptly file a copy of this document with the Auditor-General.
any impending shortfalls in budgeted revenue and overspending of a main division within Parliament's vote; and any steps taken to prevent or rectify such shortfalls or overspending; and comply with any remedial measures imposed by the Executive Authority to prevent or rectify such shortfalls or overspending.
the procurement by Parliament of goods and services; and the disposal and letting of Parliament's assets, including the disposal of goods no longer required.
covers at least the matters specified in Schedule 3 to this Act.
the management of contracts and the performance of contractors; and the implementation of the policy.
The Executive Authority may prescribe procedures for considering offers to supply goods or services that are unsolicited or are made otherwise than in accordance with Parliament's prescribed procurement processes.
may consider an offer contemplated in sub-section(1) only in accordance with the prescribed procedure.
The Accounting Officer must notify the Auditor-General and the Executive Authority in writing if a contract is concluded in respect of a tender, quotation, or other bid other than the one recommended in terms of the supply chain management policy.
Sub-section (1) does not apply if a contract was concluded in order to rectify an irregularity.
(a) be a member of a committee evaluating or approving tenders, quotations, contracts or other bids for Parliament attend any meeting of such committee as an observer; or participate in any other way in evaluating or approving tenders, quotations, contracts or other bids for Parliament.
impede the Accounting Officer in fulfilling the responsibilities of the Accounting Officer in terms of this Chapter; or amend or tamper with any tender, quotation, contract or bid after its submission.
This includes the Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000) and the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003).
Councillor, to a person in the employ of the State or to any entity in which such a person is a Director or has a controlling or other substantial interest.
Parliament must have an Authority.
consist of at least six persons with appropriate experience.
have no personal or financial interest in any matter related to the financial management of Parliament.
The Executive Authority must appoint one of the members contemplated by subsection (3) as the chairperson of the committee.
(5)The terms of appointment and remuneration of members of the audit committee contemplated by subsection (3) must be consistent with the requirements for audit committees prescribed under the Public Finance Management Act.
(6)A member of the audit committee who has a personal or financial interest in any matter before the committee must disclose that interest and withdraw from the 25 proceedings of the committee when that matter is considered.
the quality of financial management and reports compiled by the Accounting Officer in terms of this Act; and the quality of the annual financial statements; 40 report to and advise the Accounting Officer on matters relating to the financial and risk management of Parliament; and communicate any concerns it deems necessary to the Executive Authority and the Auditor-General.
If the audit committee becomes aware of information implicating the Accounting Officer in fraud, corruption or gross negligence, it must report this promptly to the Executive Authority.
Parliament must have an internal audit unit established by the Accounting Officer which must conduct internal audits in accordance with the relevant standards prescribed for pubic entities in terms of the Public Finance Management Act.
a three-year risk-based audit plan; and an internal audit program for each financial year setting out the proposed scope of each audit.
The unit must report quarterly to the audit committee on its performance against the annual audit plan.
be independent of the activities that are audited; and have access to the financial records and other relevant information of Parliament.
any material variances from Parliament's projected revenue by source, and from Parliament's expenditure projections by main division; and any remedial or corrective steps taken or to be taken to ensure that projected revenue and expenditure remain within Parliament's approved budget.
The statement must include a projection of revenue and expenditure for the remainder of the financial year, and any revisions from initial projections.
The amounts reflected in the statement must in each case be compared with the corresponding amounts set out in the projected cash-flows and in Parliament's budget.
Within 30 days of the end of each quarter, the Accounting Officer must report to the Executive Authority on Parliament's performance in implementing the annual performance plan in that quarter.
The purpose of this section is to enable Treasury to publish comprehensive expenditure figures for the public sector on a monthly basis.
the past year's annual report, and progress on resolving problems identified in the report; and performance in implementing the annual performance plan.
recommend whether an adjustments budget may be necessary; and revise projections for revenue and expenditure to the extent that this may be necessary.
within five working days of receiving the reports.
For each financial year, the Accounting Officer must prepare an annual report.
provide a report on performance of Parliament's administration; and promote accountability for decisions made during the year by Parliament's administration.
the audit committee's report; and any other prescribed information.
The format of financial statements is drawn up by the Office of the Accountant General, within the National Treasury, and prescribed in the Treasury Regulations by the Minister of Finance. It is very important that these statements are prepared on a consistent basis across government, including the Legislatures, to enable the publication of accessible and consistent information.
any material losses written off.
to the Auditor-General for auditing; and to the National Treasury for inclusion in the consolidated financial statements.
audit the financial statements submitted in terms of section 48; and submit an audit report on those statements to the Executive Authority within two months of receiving the statements.
If the Auditor-General is unable to complete an audit within two months of receiving the financial statements, the Auditor-General must promptly submit a report outlining the reasons for the delay to the Executive Authority. The Executive Authority must promptly table the report in Parliament.
Once the Auditor-General has submitted an audit report to the Executive Authority, no person other than the Auditor-General may alter the report or the annual financial statements to which the report relates.
The Accounting Officer must submit Parliament's annual report to the Executive Authority within five months of the end of the financial year concerned.
(1)The Executive Authority must table the annual report in Parliament within five working days of receiving it.
The annual report, including the audited financial statements and audit report, must be made public.
The audited financial statements of Parliament and the audit report must be referred to the Committee on Public Accounts.
promptly address any issues raised by the Auditor-General in an audit report; and advise the Executive Authority of the steps taken to address the issues.
Officer or other person responsible for the failure; and the Auditor-General may issue a special report on such failure to Parliament which must be made public.
must submit the audited financial statements and audit report to Parliament for tabling; and may issue a special report on the delay.
The Accounting Officer must report particulars of any unauthorised, irregular or fruitless and wasteful expenditure to the Executive Authority immediately on discovery.
The Accounting Officer must comply with any request by the Executive Authority, the National Treasury or the Auditor-General for information, returns, documents, explanations and motivations.
Matters listed in section 63(1) could be listed in a Schedule to the Act.
varying the time period within which any act must be performed in terms of this Act if it is necessary to achieve conformity with the budgeting or accounting cycles applicable to the public sector; and any other matter concerning the financial management of Parliament that may facilitate the application of this Act.
(2)Regulations in terms of subsection (1) may prescribe that the prior approval of the Executive Authority must be obtained for particular actions.
Regulations issued by the Executive Authority in terms of sub-section (1) may come into effect only after they have been approved by Parliament.
The Accounting Officer must publish all regulations issued by the Executive Authority after their approval by Parliament.
makes, or permits or instructs another official of Parliament to make, an unauthorised, irregular or fruitless and wasteful expenditure; or provides incorrect or misleading information in any document which must be submitted to the Executive Authority, the National Treasury or the Auditor-General in terms of this Act.
investigate promptly any allegation of financial misconduct against the Accounting Officer, unless it is obviously unfounded; and if the investigation warrants such a step, institute disciplinary proceedings promptly and in accordance with any applicable systems and procedures.
makes, or permits or instructs another official of Parliament to make, an unauthorised, irregular or fruitless and wasteful expenditure; or provides incorrect or misleading information in any document submitted to the Accounting Officer.
investigate any allegation of financial misconduct against an official unless it is obviously unfounded; and if the investigation warrants such a step, institute disciplinary proceedings within 30 days in accordance with any applicable systems and procedures.
in the management of Parliament's assets or receipt of money; or in the implementation of Parliament's supply chain management system; deliberately mislead or withhold information from the Executive Authority or Auditor-General on any bank accounts of Parliament or on money received or spent by Parliament; or deliberately provide false or misleading information in any document which in terms of a requirement of this Act must be submitted to the Executive Authority or Auditor-General.
to whom a power or duty is delegated in terms of section 8, deliberately or in a grossly negligent way to contravene or fail to comply with the delegation or a condition of the delegation; or to contravene section 10(3)(b).
It is an offence for any person to contravene section 44or 57 (3).
A person convicted of an offence in terms of section 60 is liable to imprisonment for a period not exceeding five years or to an appropriate fine determined in terms of applicable legislation or both.
The joint parliamentary committee referred to in sections 15 (1) has the powers that committees of Parliament have under sections 56 and 69 of the Constitution.
Representation on such committees must be in accordance with the Joint Rules of Parliament.
No member of the Executive Authority, the Accounting Officer or any other official exercising a power or performing a function in terms of this Act, is liable in respect of any loss or damage resulting from the exercise of that power or the performance of that function in good faith.
Without limiting liability in terms of the common law or other legislation, Parliament may recover from the Accounting Officer or other official, any loss or damage suffered by it because of the deliberate or negligent unlawful actions of that Accounting Officer or other official when performing a function in terms of this Act.
sections 31 and 39 of the Powers and Privileges of Parliament Act, 1963 (Act No.
of section 8(1).
This Act is called the Financial Management of Parliament Act, 2005, and takes effect on 1 April 2006.
Minister of Finance, on the advice of the Accounting Standards Board.
It is proposed that a Code of Ethics for members of the Executive Authority should be developed. The Code should supplement, rather than overlap with, the code of ethics for Members of Parliament which Parliament has adopted by resolution.
96(1) of the Constitution), the Code might supplement Parliament's Code by including provisions requiring members of the Executive Authority to act in good faith and meet their legal obligations; and to refrain from taking other paid work.
The Code might also provide mechanisms fordealing with complaints. The Executive Members' Ethics Act uses the Public Protector for these purposes. An alternative mechanism may be appropriate for Parliament.
Issues of conflicts of interests are already covered by Parliament's code. However, it may be appropriate to include these as the Code will have the status of an Act of Parliament.
the delegation of Parliament's supply chain management powers and duties to officials of Parliament; and the circumstances in which a contract or agreement procured through the supply chain management policy of Parliament may be amended by the parties.