Evaluating compliance of Public Finance Management Act by the Department of Labour in Limpopo Province.

Abstract

The Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999) (as amended by Act No. 29 of 1999) is one of the most important pieces of legislation passed by the first democratic government in South Africa. The Act promotes the objective of good financial management in order to maximise service delivery through the effective and efficient use of the limited resources. The key objectives of the Act are to modernise the system of financial management in the public sector; enable public sector managers to manage, but at the same time be held more accountable; ensure the timely provision of quality information; and eliminate the waste and corruption in the use of public assets. The Act, which came into effect from 1 April 2000, gives effect to Sections 213 and 215 to 219 of The Constitution of the Republic of South Africa, 1996 for implementation at the national and provincial spheres of government. These sections require national legislation to establish a national treasury; to introduce uniform treasury norms and standards; to prescribe measures to ensure transparency and expenditure control in all spheres of government; and to set the operational procedures for borrowing, guarantees, procurement and oversight over the various national and provincial revenue funds. The Public Finance Management Act adopts an approach to financial management that focuses on outputs and responsibilities rather than the rule-driven approach of the previous Exchequer Acts. The Act is part of a broader strategy on improving financial management in the public sector. The Public Finance Management Act replaced or superceded the various national and provincial Exchequer Acts and the Reporting of Public Entities Act. The study concerns itself with the evaluation of compliance with the Public Finance Management Act by the Department of Labour in Limpopo. The objective of the study is to analyze and assess the implementation and execution of the Public Finance Management Act (PFMA), and to evaluate the compliance of Public Finance Management Act by the Department of Labour in Limpopo Province. Quantitative research methodology was chosen for this study. Data collection strategy used was questionnaires. The researcher employs a strategy of inquiry, such as survey, to investigate a research question. The findings of this research were that communication barrier and lack of training in financial related matters is a challenge for the Department of Labour in Limpopo. The researcher also found that the Accounting Officer at DoL Limpopo did not introduce a system of internal audit under the control and direction of an Audit Committee as it is a prerequisite of the Public Finance Management Act.