PUBLIC FINANCIAL
MANAGEMENT
MPGA822
Tutorial Letter - 2006
Lecturer: Prof EP Ababio
1.
INTRODUCTION
Welcome to the study of Public Financial Management. I
trust that you will not only enjoy the subject, but that you will
also find it useful in your particular work environment. If
there is one thing South Africa is in dire need of, it is the establishment of efficient
and effective public financial management practices for public service delivery.
Studying in the field of Public Financial Management is therefore essential.
However, knowledge of all the theories pertaining to this field of study is not
enough. It is therefore of the utmost importance that you supplement your
theoretical studies with observation and research in practice. Hopefully aspects
such as budgetary, procurement and internal control management could become
research titles for some of you.
2.
SYLLABUS
This subject will focus on some of the key issues in Public Financial Management
as it is being applied in the public sector. You already have a study guide for this
subject, but you are expected to also consult other sources about the subject,
especially when you do your assignment. The following textbooks can therefore
be recommended when studying this module:
Visser, C.B. & Erasmus, P.W. 2002. The Management of Public Finance: A
Practical Guide. Cape Town: Oxford University Press.
Pauw, J.C., Woods, G., Van der Linde, G.J.A., Fourie, D. & Visser, C.B. 2002.
Managing Public Money: A system from the south. Sandown: Heinemann.
The syllabus for Public Financial Management is as follows:
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Financial policy interpretation and implementation
Linking strategic planning and budgeting
Budgetary control
Management of revenue and liabilities
Risk management
Design and assessment of internal control systems
Performance measurement and management
Financial and performance reporting
Procurement management
Asset management in the public sector
Intergovernmental fiscal relations
You are encouraged to consider the following as possible sources of information for
the successful completion of your assignment:
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Suitable articles from magazines and newspapers
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 Interviews
 Government reports, documents and policies (see WWW.gov.za)
Read newspapers to keep abreast of any activities that directly influence your field
of study. Also read subject-related journals such as:
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3.
Administratio Publico
Journal of Public Policy
Local Government Digest
Public Administration and Development
Journal of Public Administration and Management (SAAPAM)
OBJECTIVES OF MODULE
After you have completed this module, you should be able to:
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4.
interpret and implement revised or new financial management policies in a
department;
link the strategic plan of a department with the budget estimates thereof;
exercise budgetary control in a main division (programme) of the vote
(department);
establish and assess the internal control system of a department in
collaboration with internal auditors;
apply credit control and revenue management measures in a department;
institute measures for the proper management of liabilities;
exercise risk control and management within a department;
direct the development and assessment of internal controls in a department
in collaboration with internal auditors;
measure and manage the performance of entities within a department;
compile financial and performance reports with the assistance of the Chief
Financial Officer (CFO) and Finance section;
manage the decentralised procurement system;
monitor and control the management of assets; and
manage the transfer of funds and grants to other spheres of government.
ASSIGNMENT
There is only one assignment set for this subject. Once your assignment has been
evaluated it will be returned to you as soon as possible.
ASSIGNMENT
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Due Date: 8 September 2006
Select any one of the following issues and demonstrate the extent to which the
theory of it is applied at your work or at any work environment.
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Linking strategic planning and budgeting.
Budgetary control.
Risk management
Performance measurement and management.
Financial and performance reporting.
Procurement management.
Asset management
Your assignment should reflect the following:
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A strong theoretical explanation of what the concept entails
the provisions of the relevant legislation that is considered, especially
those of the PFMA, the PPPFA, etc – include any where relevant (do not
write a separate part only on legislation);
the use of budget control measures;
internal control practices that will be applied;
performance and risk management issues that have been taken into account;
and
the management of revenue and liabilities
[100]
The assignment counts 40% and the examination 60%. It is therefore
important to do well in the assignment and to compile a scientific document.
ASSIGNMENT REQUIREMENTS
i)
General
You are expected to submit work of high standard. The assignment must portray
the following:
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Evidence of thorough research
Knowledge about the relevant matter
An ability to predict, analyse, interpret, synthesise and evaluate situations and
phenomena
A thorough insight into public financial management
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An understanding of the dynamics involved in human resource management
Please do not provide any sensitive or confidential information.
ii)
Length
The assignment should be between 15-20 typed pages.
iii)
Structure/layout
The assignment should comply with the following:
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A suitable title
Table of Contents (a list of all the headings and sub-headings used in your
assignment)
Introduction (explaining your work context and your specific approach)
Headings and sub-headings; paragraphs, punctuation marks and text
references
Conclusion (drawing the project to a close and emphasising the main points
without repeating everything)
List of References (listing all the sources you referred to in your assignment,
in alphabetical order)
Acknowledgement of sources
 When information is directly or indirectly borrowed from sources, the sources
must be acknowledged.
 For the purpose of uniformity you are advised to use the following method
where at least the author’s name, date of publication and page number must be
given in the text, e.g. Dunsire (1999:10).
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The following are examples of references:
 When the author’s name is part of the sentence, the year and page
number follow in round brackets, e.g. “...this may be, as Dunsire
(1999:10) points out ...”
 When the author’s name is not part of the sentence, it follows in round
brackets, together with the year and the page number, e.g. “...it serves as
an unproved fact that management is important (Dunsire,1999:10).”
 When referring to a work written by two authors, give both names. Use
the “&” sign between the two surnames instead of the word “and”, e.g.
“...recent studies (McNurlin & Sprague, 1998:10) show ...”
 Reference to a study guide take the following form: (PU for CHE,
MPGA875, 2001:10).
An alphabetical list of all the sources you have referred to in your assignment must
be included on a separate page at the end of every assignment to indicate which
sources were used to answer the assignment. Use relevant and recent sources.
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The following is an example of how to set out your List of References:
Abedian, I. 1997. Reserve Bank out of Gear. Financial Mail, 147(6): 53, Jun. 6.
Archibald, V. 1994. Accruals Accounting in the Public Sector. Harlow: Longman in
association with the Civil Service College
McKinney, J.B. 1995. Effective Financial Management in Public and Nonprofit
Agencies: A practical and integrative approach. London: Quorum Books.
Pauw, J.C., Woods, G., Van der Linde, G., Fourie, D. & Visser, C.B. 2002.
Managing Public Money: A system from the south. Cape Town: Heinemann
Pendlebury, M.W. (ed). 1990. Management Accounting in the Public Sector.
London: Heinemann in association with the Chartered Institute of Management
Accountants.
Schutte, H. 1997. OG wys swak finansiële beheer uit oor Gauteng-behuising.
Sake-Beeld, :S10, Mei 7.
South Africa (Republic). 1996. Manual on the Financial Planning and Budgeting
System of the State. Pretoria: Department of State Expenditure.
Visser, C.B. & Erasmus, P.W. 2002. The Management of Public Finance: A
practical guide. Cape Town: Oxford University Press.
It is important to remember that only the sources referred to in your
assignment must be listed in your list of references.
iv)
Assignment cover
Please ensure that your name, address and contact details are on the cover of
your assignment.
v)
Assignment planning
Answers to the assignment question must be specific and as comprehensive as
possible. If you want to quote from sources, acknowledge the relevant sources.
However, keep quotations from sources to a minimum and use your own words.
Substantiate all statements/facts with text references and suitable, practical
examples. Expand on the subject by drawing on sources other than those listed in
this tutorial letter.
Remember the following when you compile the assignment:
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Analyse each question carefully so that you can identify those aspects of the
study material that are relevant. Do not latch onto some “keyword” and think
that that is all that is asked. Often more than one facet has to be dealt with. You
will realise this if you read the question carefully.
Make sure that your answer is directed at the specific question as it has been
asked. Do not deal generally with a topic if you have been asked to solve a
specific problem. You will only be able to give an exact answer if you first read
the question carefully.
How to approach the question:
Unless otherwise indicated, answers to the assignment questions must be
presented in the form of an essay. It has to comply with all the technical
requirements.
a)
Analysing the question:
Ask yourself: “What is being asked?” Then write your answer while constantly
keeping the question in mind. Analyse the question systematically on the basis of
the following hints:
 What is the topic?
 What aspects are involved?
b)
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vi)
Selection and arrangement of information:
Once you understand the question, you can proceed to selecting relevant
information.
Draw up a provisional framework. In this way you can decide what aspects
can be left out. As you proceed you can change your framework. Avoid
repeating yourself.
Make summaries of source material in your own words. Make a note of
references. In your essay you must constantly acknowledge the sources of your
information (by means of text references). References in the text must correlate
with the sources listed in the Bibliography.
Assignment evaluation
Your assignment will be marked according to the following guidelines. Make
sure that you adhere to these guidelines in order to obtain the maximum
marks.
1.
Introduction and Conclusion
 Explain topic
 Explain aims
 Summarise findings
 Deductions
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2.
Technical Care:
 References
 Language and spelling
 Division/headings
 Bibliography
(15%)
3.
Insight and Practical Application
 Logical reasoning
 Practical examples
(40%)
4.
Content
 Comprehensiveness
 Research
 “The Golden Threat”
(30%)
EXAMINATION GUIDELINES: 3 NOVEMBER 2006
Guidelines for the examination are as follows:
NOTE! This is a closed book examination
1.
Structure of the paper
This is a three hour closed book examination. It is therefore important that you
familiarize yourself with the content of the study guide.
The examination paper will consist of four questions of which you must answer
three. Each question counts 33 1/3 marks. The total marks of the examination
paper is therefore 100 marks.
2.
What you can expect
Read through the whole study guide and concentrate on the following aspects:
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The policy formulation and implementation processes and the imperatives
for policy formulation that can contribute to successful implementation.
The need for flexibility in budgetary control.
The legislative requirements for the management of revenue and liabilities.
An exposition of the risk management process.
The aspects that must be considered in the design of an internal control
system.
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The different components of performance management to provide an
overview of performance management from a financial management
perspective.
The statutory requirements for financial and performance reporting as well
as for financial statements.
The role-players and structures in public sector procurement as well as the
five pillars and norms and standards on which it is based.
Asset management, including the following aspects:
 A description of the term “assets”
 The requirement for asset management
 The asset management process
 The physical asset strategic plan
The principles and implementation of co-operative government and the
legislative framework for intergovernmental fiscal relations (IGFR).
I wish you success in your studies in this module.
PROF EP ABABIO
2006
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