NORTH WEST PROVINCIAL LEGISLATURE Legislature Building Dr James - - PDF document

NORTH WEST PROVINCIAL LEGISLATURE

Legislature Building Dr James Moroka Drive Private Bag X20I8 MMABATHO 2735

PORTFOLIO COMMITTEE ON FINANCE REPORT ON PRESENTATION BY DEPARTMENT OF FINANCE ON THEIR STRATEGIC PLAN - 2 0 0 9 / 1 0 .

BRIEF OVERVIEW

• 1. On the 26 t h June 2009, the provincial Department on Finance

presented to the Portfolio Committee on Finance their Strategic Plan for 2009/10.

INTRODUCTION The Department of Finance has been allocated R 335 966, OOO for the current financial year 2009/10. OBJECTIVE The objective of the meeting was for the Committee to receive a presentation from the Department of Finance on their 2009/10 Strategic Plan. This had to be done in order for the Committee to be informed, as part of processing the budget for the department to be passed in the Provincial Legislature. PRESENTATION The department highlighted their;

• Strategic overview.
• External & internal focus.
• Overall budget per programme.
• Key deliverables per programme.
• Challenges.

Strategic Overview This encompasses the main aim of the department being to act as a custodian of public resources. The department provides provincial transversal strategic services through internal audit, information technology, provincial supply chain management, provincial accounting, financial capacity and centralized creditor payments. The department also provides financial management support to public entities and municipalities. External & Internal Focus The department ensures that there is efficient allocation of resources in accordance with national and provincial priorities. The department also implements and monitors the impact of supply chain reforms in the province. In conjunction with departments and institutions of state they strengthen financial management support to departments through norms, standards and training as well as improving external communication with stakeholders. The department offers transversal internal audit services to all

• departments. The department is in the process of developing a

revenue enhancement strategy and coordinates the process of asset and risk management in the province. The department has also managed to reduce the number of qualified audit opinions in provincial departments and municipalities.

With regards to the internal focus the aim of the department is to;

• Provide human resource services.
• Implement training and transformation initiatives.
• Implement the new employee wellness framework and

Occupational Health & Safety interventions.

• Implement Minimum Information Security Standards (MISS).
• Implement a Special Programmes directives.
• Improve internal communication.
• Implement sound financial management inclusive of risk

management within the department. Departmental budget

PROGRAMME AMOUNT

1.

Administration R61,808 2. Sustainable resource R65,249 3. Asset & liability mgt R16,138 4. Financial governance R94,605 5. Municipal finance R17,912 6. Information Technology R80,254 TOTAL BUDGET R335,966

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Key Deliverables per Programme Programme 1 Administration will focus on;

• Reviewing departmental strategic plan and organizational

structure to align with the requirements of National Treasury and the Department of Public Service & Administration.

• Enhancing capacity in critical areas in the department.
• Implementing MISS operational programmes.
• Develop/amend and monitor human resource policies in line with

Labour Legislation.

• Monitor staff performance in line with Performance.
• Implement leamerships and internships in 2009/10.
• Hold departmental communication events.
• Strive to obtain unqualified audit opinion.
• Improve on asset management
• Implement risk management in the department.

Programme 2 Sustainable Resource will focus on;

• Build capacity and appoint personnel in key areas that support

departments.

• Continue with performance budgeting techniques.
• Rolling out Standard Chartered of Accounts (SCOA) toning.

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• Implement infrastructure capacity building efforts through the

Infrastructure Development Improvement Programme (IDIP)

• Addressing the social cluster financial challenges in particular

Department of Health & Social Development.

• Develop and implement revenue enhancement strategy this in

light of increasing the revenue base.

• Monitor departmental spending through monthly and quarterly

reports.

• Monitor compliance on budgeting and expenditure management

in public entities.

• Establishment of Public Private Partnership (PPP) unit in

Provincial Treasury.

• Monitor planning and implementation of infrastructure projects

and conditional grants. Programme 3 Asset & liability management will focus on;

• Repeal the North West Tender Board Act of 2008.
• Provide training, support and policy guidance on supply chain

management.

• Monitor compliance oversight with regards to Supply Chain

Management policy and legislation.

• Empowerment of suppliers by conducting outreach workshops on

accessing government services.

• Coordination and management of provincial and national

transversal contracts.

• Monitoring and evaluating the impact of Supply Chain in the

province in terms of job creation and poverty alleviation. Programme 4 Financial Governance will focus on;

• Providing quality accounting services to all departments.
• Assisting departments with developing plans that address audit
• utcomes the aim being to eliminate repetitive audit queries.
• Preparation of monthly management accounts of tribal and trust

accounts, invest accounts and distribute interest monthly.

• Consolidate provincial revenue fund, annual financial statements
• f departments and public entities.
• Providing training and workshops to provide technical financial

capacity in departments.

• Introducing a liability management system in five pilot

departments.

• Providing financial technical training to public entities and

municipalities.

• Speed up supplier payment turnaround time through Electronic

Funds Transfer (EFT)

• Project manage the Walker system to BAS migration.
• Conduct follow up audits on Auditor General's findings and the

Provincial Public Accounts Committee's (PPAC) resolutions.

• Provide support to the Provincial Audit Committee.

Programme 5 Municipal Finance will focus on;

• Assessment of the implementation of new budgeting standards

and reporting formats.

• Assess financial management capacity and performance levels of

municipalities.

• Support municipalities to comply with GAMAP/GRAP.
• Develop plans to address the audit outcomes to reduce the

number of qualified opinions.

• Provide support to implement supply chain management policies

and guidelines.

• Assist municipalities to develop financial policies.
• Monitor overall implementation of the Municipal Finance

Management Act No.56 of 2003. Programme 6 Information Technology will focus on;

• Establishing an Information/Resource Center to assist

users with websites, e-mails and customer support.

• Establish platform for Walker to BAS implementation.
• Local Area networks for departments are upgraded.
• Wide Area Network upgrade in line with national priorities.
• Roll out Voice Over Internet Protocol (VoIP)
• Architecture integration to be established for e-

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• Departments being assisted with web page development

and design. CHALLENGES OF THE DEPARTMENT

• Training officials to ensure smooth implementation of the Public

Finance Management Act of 1999 (PFMA) and the Municipal Finance Management Act of 2003 (MFMA).

• Securing full co-operation of accounting officers in budgeting and

effective budgetary controls.

• Instituting effective and meaningful monitoring of in-year

reporting by departments in accordance with the PFMA and Treasury regulations.

• Providing capacity building for the roll out of the MFMA.
• Preparing consolidated annual financial statements for all public

entities, trading entities and all thirteen departments in preparation of financial statements.

• Curbing the irregularities in supply chain management by

balancing procurement controls and just in time quality service delivery.

• Providing a transversal information technology service to support

reporting and other information technology needs.

• Providing capacity building and skills development which

enhances the provinces'job creation and economic development.

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• Has the department devised a comprehensive plan for the

current economic meltdown?

• What is the Growth Domestic Product (GDP) per capita of

the province?

• What are the audit outcomes of North West municipalities?
• What is the role of the Provincial Treasury with regards to

MFMA?

• What is happening to the public entity namely North West

Youth Development?

• What is national and provincial government doing with

regards to the fluctuation of food prices?

• How do municipalities manage to exceed their budgets and

what measures are in place to curb their overspending?

• What is the source of revenue in the province?
• There is alleged corruption in the procurement process at

the department is this the case?

• With regards to Programme 5 is it sufficient to aid

municipalities as they are falling apart, especially with regards to assisting municipalities to develop financial policies, this comes across that municipalities have not been having financial policies to guide them?

• Is there a special fund at Treasury or Local Government to

assist municipalities with their core functions?

• Has it been the stance that there has been preferential

procurement processes for particular individuals or companies?

• Who do the departments have long term contracts with?

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• Why is it that the E-Government system cannot be

implemented?

• With the outcome of the Auditor General's reports, how

effectively are the findings and regulations used?

• Is the Provincial Audit Committee functional?
• Is there a tool used to audit how conditional grants are

used?

• Senior Managers in departments influence Bidding

Committees, what measures are in place to curb this?

• With regards to the FFC formula, allocation by National

Treasury to Provincial Treasury, can funds allocated be diverted elsewhere by Provincial Treasury where they may deem more necessary?

• With the migration of GAMAP/GRAP have municipalities

been supported?

• In the municipalities are there any that have functional

internal audit units, and if not what measures are in place to establish them.

• Those who are on the provincial database as service

providers, do they benefit from supply chain management in the province?

• A municipal expenditure and budget report is required by

the Committee.

• How does department plan to approach assisting

municipalities with support?

• Has the department assisted those municipalities in the

province that receive an Auditor General's Report on a repeated basis?

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• Should the budget of the province not be prioritised to

critical areas in the province such as rural development?

• With regards to Information Technology does new

equipment need to be bought every year?

• What intervention is there with regards to technical

support? CONCERNS

• With the formation of the Forensic Unit in the department,

all pending cases of corruption should be re-visited and dealt with.

• The department should provide full quarterly reports to the

House and then they be made available in libraries for the public.

• In most departments there are few people hired

specialising in supply chain management. Administrative Clerks are usually asked to take on the task of working in the supply chain management section, this is unacceptable.

• Officials in the municipalities have not signed performance

agreements making regulating performance output non efficient.

• The Department of Finance needs to oversee the

departments on their Auditor General reports, there are too many roll-overs.

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RECOMMENDATIONS

• Internal Audit units of departments be functional and they

should produce quarterly reports to the Committee.

• The department with their own budget revise to

accommodate the under resourced IT sector of which all departments rely on the Department of Finance for. The IT network should be expanded to public entities and

• libraries. Possibly the Department of Finance could take
• ver all IT systems of the departments.
• The Committee would like the following reports in thirty

days; > Growth of the budget in the province from 1999 - 2004 & 2004 - 2009. > A comprehensive report on all long-term contracts in all the departments from 1999 - 2004 & 2004 - 2009. > Forensic outcomes of; North West Housing Corporation and DED > An analysis report on the provincial business community, outlining those who are not residents in North West. > Reports on forensic investigations on the departments of; Agriculture, Social Development and Health. > With regards to the ailing systems in municipalities how will the department assist with GAMAP/GRAB. 13

The department should engage with other departments on the Financial & Fiscal (FFC) submissions and maybe there is a need for a multiparty stakeholder to look into the revision of the FFC revision for the North West province. There needs to be an audit evaluation on the Bidding Committees in all the departments. A retention policy needs to be developed by the department and the broader financial section for retention

• f the workforce in the province.

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The Committee recommends that the Provincial Legislature adopt the budget for the Department of Finance of R 335,966 OOO for the financial year 2009/10. SIGNED HON T MODISE CHAIRPERSON: FINANCE, ECONOMIC DEVELOPMENT & TOURISM DATE

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