Presentation to:
•Portfolio
Committee on
Finance; and
•Joint Budget
Committee
18 March 2008
FINANCIAL
MANAGEMENT
OF
PARLIAMENT
BILL
OPTIONS FOR
PROCESSING THE
BILL
•Consider the
published version (28
October 2005); or
•Consider the version
of the Bill that served
before the Committee
(2 August 2006)
DIFFERENCES BETWEEN THE TWO VERSIONS
Comparative analysis of the two versions:
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•
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Minor amendments (e.g. long title, preamble inserted, separate clause for provincial
legislatures, expenditure before the budget is passed, transfers, executive directive with
financial implications, procurement, composition of audit committee, preparation of
financial statements, a schedule for transitional arrangements)
Oversight of annual budget of Parliament
Annual budget and the PFMA
Support for members and political parties
Norms and standards for provincial legislatures
ROLE FOR COMITTEES IN LEGISLATION
Oversight of annual budget of Parliament
•
•
•
•
•
•
Published version provides for oversight through joint committees and Committee on Public
Accounts (clauses 15, 53, 59, 69.
Committee version maintains the oversight mechanisms, but changes the structure of the Bill to
consolidate establishment and powers of joint committee (clauses 4, 17, 54, 60). More
appropriately, the Committee’s version provides that the strategic plan, annual performance plan
and budget is approved by the Houses instead of the joint committee (clause 11 compared to
clause 13; see also clause 15).
Principle issue 1: Whether the Bill should be specific to define and establish a joint committee
and the Committee on Public Accounts, and if so, to what extent?
Principle issue 2: Committee on Public Accounts, as presently constituted, excludes the NCOP
from participating and, therefore, limits the authority of the NCOP to determine and control its
internal arrangements proceedings and procedures
Consideration could be given to whether the Bill should refer an oversight mechanism (borrowing
from the Public Audit Act) or to an appropriate joint committee instead of Committee on Public
Accounts.
Alternatively, consideration should be given to include the NCOP in the definition of Committee
on Public Accounts.
PRINCIPLE OF SEPARATION OF POWERS
Annual budget of Parliament and application of the PFMA
• Minor amendments effected to published version in Committee’s version (compare
clause 14 with clause 16), and provision made for reference to adjustments budget
(clause 17).
•Committee’s version defines and uses “approved budget” instead of “vote” to make the
provisions relating to “unauthorised expenditure” applicable to funds from own revenue
excluding donor funds (see clause 20).
•The Committee’s version provides for recovering unauthorised expenditure (clause
20(5)) and provides for a separate procedure in respect of approving or recovering
unauthorised expenditure of donor funds (clause 21).
•Budget process is central to giving effect to principle of separation of powers. Clauses
referring to the PFMA (clause 14(2)(g) / 16(2)(h(1); and 55(1) / 56(1)) and clauses that
require joint decision making with the executive (clause 15(2)(a) / 17(2)(a)) should be
considered with caution. It is useful to remember that Parliament may amend the PFMA
only after consultation with the Minister of Finance (section 4).
•Clause 71(b) of the published version repeals the provision in the PFMA that refers to
Parliament. However, the Committee’s version omits this clause (compare clause 73)
and explicitly makes the PFMA applicable again (see clause 72).
•Certain textual amendment effected to treatment of unspent funds (clause 23)
SUPPORT FOR MEMEBRS AND POLITICAL PARTIES
Constitution refers specifically to support for political parties and its
leader in the National Assembly
•The Published version distinguishes between support for political parties and
constituency funds (clauses 32 & 33), whilst the Committee’s version consolidate these
in one clause (clause 34).
•The Committee’s version changes the provisions of the published version substantially
by providing in detail for regulations to be made pertaining to the disbursement, purpose,
accountability, and auditing of these funds.
•Whereas the published version requires forfeiture of constituency funds in response to a
party’s failure to submit its financial statements to the accounting officer, the Committee’s
version requires regulations to authorise the accounting officer to withhold funds.
•Principle issue: Should the accounts of political parties be audited by the AuditorGeneral, and if so, does the Auditor-general have capacity for this?
PROVINCIAL LEGISLATURES
Norms and standards for provincial legislatures
•Both versions provide for norms and standards for provincial legislatures in a Schedule
to the Bill.
•Section 76(4)(b) of the Constitution requires legislation to be considered in accordance
with the procedure established in section 76 if it is legislation envisaged in Chapter 13
and includes any provision affecting the financial interest of the provincial sphere of
government.
•Provision should be made for the financial management of provincial legislatures in a
separate Bill considered in accordance with the section 76 procedure (compare the
procedure of the PFMA)
CONCLUSION
Practical considerations
appears to dictate that the
Committee’s version would be
the easier one to proceed with.
If this is the case, attention
should be given to embolden
the principle of separation of
powers and clarify the
participation of the NCOP in
scrutinising the audited financial
statements of Parliament