Finance and Economic Opportunities

With regards to the Public Finance Management Act (PFMA):

The Provincial Treasury has in response to COVID-19 implemented the following precautionary measures to ensure compliance to the Public Finance Management Act from a procurement and financial management perspective:

1. A COVID -19 coordination function within the Provincial Treasury (PT) for the Finance and SCM Cluster to ensure financial governance, procurement and financial management requirements are met in terms of the Disaster Management Act and its regulations;
2. A Central Procurement Advisory Committee, constituted of key senior management officials within the PT, Head of the PDMC and CFOS from the Departments of Health; Transport and Public Works; Local Government and Social Development; and
3. Provincial Treasury logistics support and advisory team to support the Humanitarian Relief Stream and a Provincial Treasury medical supplies advisory and support team to support the procurement of medical supplies and PPE.
4. The following Treasury Circulars were issued on the PFMA side:
   • System Circular No 01: Business continuity measures in preparation of covid-19 for the corporate Financial systems (BAS, LOGIS & PERSAL) and its related business intelligence tools;
   • Treasury Circular No. 11 of 2020: Western Cape Government's Procurement Requirements in response to the Declaration of a National Disaster due to the CORONAVIRUS (COVID-19) Pandemic on 23 March 2020
   • Treasury Circular No. 12 of 2020: Financial Measure in Response to COVID-19: This circular aims to inform all Western Cape Government departments, public entities and the Provincial Parliament (where applicable) of financial measures to be put in place to respond to the COVID-19 pandemic.
   • Treasury Circular No. 13/2020 dated 25 March 2020:  To provide Accounting Officers with the principles and programme regarding the rollover of unspent funds and retention of over-collected own revenue from 2019/20 to 2020/21.
   • Treasury Circular No. 14 of 2020: Facilitating the receipt, reporting and accounting of cash donations to the Western Cape Government Departments and Entities, to inform Western Cape Government Departments and Provincial Public Entities of the arrangements related to cash donations, budgeting, accounting and reporting in response to the Covid- 19 pandemic. This circular complements the Western Cape Disaster Budgeting Procurement and Accounting Framework.
   • Treasury Circular No. 17 of 2020: Guidelines: 2019/20 Book Closure and Annual Financial Statements: To provide direction and guidance to Accounting Authorities (AAs) and Chief Financial Officers (CFOs) of public and trading entities with the book-closure and compilation of the annual financial statements process for the year ending 31 March 2020.
   • Treasury Circular 18 of 2020: Guidelines: 2019/20 Book Closure and Annual Financial Statements for Departments, to provide further direction and guidance to departments on the annual financial statements process for the year ending 31 March 2020 based on the implications of the exemptions provided for by the Minister of Finance in Government Gazette 43188 dated 31 March 2020
   • Treasury Circular 19 of 2020: Programme and Guidelines for the 2019/20 Annual Report Process: To provide Accounting Officers, Accounting Authorities and Chief Financial Officers with a Programme and Guide in respect of the 2019/20 Annual Report process, inclusive of the Annual Financial Statements.
   • Various Emails to provide guidance to departments on the submission of the In-Year Monitoring and Reporting (IYM) Model.
5. Initially, daily check-in meetings with the COVID-19 Coordinator were held and scaled down, as soon as the requisite disaster governance structures were put in place, to meeting every second day.
6. Weekly Finance and SCM Insight Reports are produced to internally to support Provincial Treasury decision making in response to COVID-19 transversal issues.
7. Weekly Expenditure reports are consolidated for the Province and reported to the National Treasury.
8. The Head of Treasury submitted daily reports but was thus reduced to every second day progress made to Cabinet and Provincial Top Management.
9. Transversal Procurement initiatives include:
   1.  the setting up a database for medical and non- medical PPE suppliers that provided for the central management of governance requirements, supply and demand availability, lead times and benchmark pricing for departments and municipal utilisation;
   2. the setting up of a cloth mask manufacturer database that provided for the central management of governance requirements, supply and demand availability, lead times for departments and municipal utilisation; and
   3. Management of queries, and the provision of procurement support, assistance and guidance through the SCM helpdesk to departments, municipalities, entities and suppliers
10. From a Financial Systems enablement perspective, the following have been made provision for:
    1. BAS: SCOA item will be created as a project for COVID-19 which must be used when procuring essential goods and/ services to respond to the disaster;
    2. LOGIS stores will be linked to the created project segment;
    3. MEDSAS and / LOGIS: will be the required mechanism for requisitioning, ordering and invoicing. Systems capture screens will be used as evidence;
    4. eProcurement System(ePS): provision will be made on the ePs to indicate whether the RFQ is linked to COVID-19. Systems generated dash-boarding and / reporting on all RFQs/ awards will be used as evidence; and
    5. provision was made for departments to lift the threshold for the ePS during the lockdown and limited or single source bidding may be invited on the system.
11. Engagement with National Treasury to develop the exemption notice that was issued on 31 March 2020, requiring submissions specifically mentioned in the Notice GG 43188 notice 437 will be suspended to a date after lockdown is lifted. e.g. submission of the AFS which in the norm is submitted on 31 May be submitted on 31 July 2020.
12. Engagements with local AGSA regarding the suspension of all audit related work until the lockdown had been lifted. AGSA issued a national instruction that all audit work will be suspended with immediate effect as departments and entities were readying themselves to work from home, and would not have the available infrastructure to deal with important, but not urgent, matters raised by the AGSA.
13. Consulted with National Treasury for a bilateral discussion with the AGSA on addressing audit scoping matters considering the impact of the revised dates on audits.

With regards to the Municipal Finance Management Act (MFMA):

The Provincial Treasury has in response to COVID-19 implemented the following precautionary measures to ensure compliance to the Municipal Finance Management Act 56 of 2003 (MFMA) from a procurement and financial management perspective:

1. The national Minister of Finance in terms of the Municipal Finance Management Act 56 of 2003 (MFMA) issued a conditional Exemption Notice dated 30 March 2020, in order to ensure effective and efficient service delivery and to minimise any potential delay in decision making. The notice addresses amongst others the following:
   1. The Exemption Notice provides an exemption from a provision of the MFMA which requires any action to be taken between the date of publication of the notice and the date that the national state of disaster lapses or is terminated in terms of section 27(5) of the Disaster Management Act, 2002;
   2. Municipalities and municipal entities will be exempted from the timeline provisions in the MFMA until such time that the national state of disaster declaration is lifted by the President; and
   3. The exemption is conditional that the MFMA timelines referred to are, complied within 30 days after the national state of disaster is lifted.

2. Continuous support to municipalities and municipal entities has been provided via the existing IGR structures and MFMA helpdesk. In addition, a provincial circular was also issued to provide guidance and clarity to Accounting Officers of municipalities and municipal entities in respect of:

1. Managing their procurement requirements in response to the Coronavirus (COVID-19) pandemic and the subsequent business continuity during the lockdown period and thereafter.
2. The impact of NT MFMA Circular 101 relating to COVID 19 - Bulk Central Procurement Strategy for Government Institutions.

3. Treasury Circular Mun No. 06 of 2020: Western Cape Government's Response Plan for Disaster Procurement Requirements in Respect to the Lockdown for the Coronavirus (COVID- 19) on 23 April 2020. During the Strategic Integrated Municipal Engagements which focusses on the draft budgets currently prepared by Municipalities, guidance is also provided on the impact of the COVID-19 pandemic on financial modelling and budget preparations.
4. Furthermore, despite the national lockdown, most municipalities continue to comply with the legislative prescripts in terms of in-year reporting on budget implementation. In this regard, the consolidated statement reflecting the financial performance of municipalities as at the end of the third quarter (ending 31 March 2020) of the 2019/20 municipal financial year was published in Provincial Gazette Extraordinary Nr. 8234 dated 30 April 2020 propelled by Section 71(7) of the MFMA.  Limitations observed in the publication due to the national lockdown relate to:
   1. 1. Beaufort West municipality that submitted no financial data strings. The budget performance outcomes for Beaufort West Municipality is therefore for the period ending 29 February 2020.
      2. Overstrand, George, Central Karoo District and Beaufort West Municipalities that did not submit non-financial data strings in respect of Debtors and Creditors age analysis. No information is therefor included in the publication.

Provincial Treasury is continuously working with the aforementioned municipalities to resolve issues as it pertains to data strings.