Finance and Economic Opportunities

The Provincial Treasury already implements a preventative and pre-emptive approach to prevent irregular, fruitless and wasteful expenditure and unauthorised expenditure in the provincial government and at municipalities.

At a regulatory level, differences of opinion between government institutions and the auditors, which account for a significant amount of the irregular, fruitless and wasteful expenditure in the Western Cape, are escalated to National Treasury for adjudication.

Provincial Treasury is also driving the adoption of an Alternative Dispute Resolution mechanism so that any disagreements can be handled following nationally approved policies and procedures. This will result in a further reduction in irregular expenditure, as the Western Cape Government strives to follow the rule of law.

And, Provincial Treasury will develop a Standard Operating Procedure to guide departments in dealing with the unauthorised expenditure.

From a support perspective, the Provincial Treasury's has several financial management improvement initiatives that focus on:

• Governance issues, such as the Corporate / Municipal Governance Review and Outlook (MGRO and CGRO) process, including the Financial Management Capability Maturity Model tool (FMCMM);
• Budgeting and planning accountability through the institutionalisation of medium-term expenditure committees and regular, integrated technical and strategic engagements with municipalities.
• Supply Chain Management (SCM) support, through various SCM forums that provide a platform for CFOs and SCM managers to engage with the Auditor-General of South Africa regarding the SCM interpretation challenges.
• Assurance systems support, through provincial workshops with municipal assurance providers focussing on how to enhance combined assurance within the SCM environment (drawing on the roles of SCM manager, line manager, Audit Committee, Internal Audit and Risk functions).
• Audit readiness assessments that take place both in the PFMA and MFMA space, with guidance issued via circulars.
• Continuous support to institutions through the audit process on audit challenges in terms for CoMAF’s and liaison when required with both the National Treasury and the Auditor General South Africa (AGSA) on transversal issues. This is the most effective method to prevent the differences of opinion that arises between client and auditor.
• Support on the implementation of and compliance with applicable financial misconduct regulations by municipalities, through orientation and briefing engagements with relevant role-players, monitoring and support in the implementation of regulations, and the development of draft process maps to improve municipalities’ compliance with the said regulations. These draft process maps are currently with the National Treasury for further comment.
• Training to Municipal Public Accounts Committees (MPACs) across the five districts in respect of the National Treasury MPAC guide and toolkit; and
• Financial support to improve financial management in municipalities through the Financial Management Support Grant and the Financial Management Capacity Building Grant.

Finally, at an operational level, activities are focussed on supporting individual auditees to address all issues that are identified during audit cycles, such as irregular expenditure, with appropriate priority and to prevent recurrence.

(b) how does his Department intend to implement the provisions of the amendments of the Public Audit Act, 2004 (Act 25 of 2004);

The amendments to the Public Audit Act and the Material Irregularity Regulations issued in accordance with the Public Audit Act went into effect on April 1, 2019.

The AGSA has statutory authority to determine how and when certain elements of the amendments will be implemented. The AGSA chose a phased approach to the handling of material irregularities for the 2019-20 audits, which includes implementing the process only at selected auditees.

Provincial Treasury has requested the head of the AGSA in the Western Cape to present their strategy at the Provincial Top Management, Municipal Managers Forum as well as to the Provincial Treasury top management. The prevailing understanding is that the AGSA is not introducing more procedures to the already implemented compliance procedures; it is merely intensifying their follow up of prior period commitments to see the effectiveness of consequence management.

(2) (a) and (b) (i) (aa) 

Yes, however the condonation process is currently underway, and Departments and entities will receive responses for requests for condonations by 31 May 2021. As this process has yet to be finalised, this information is not yet available.

2 (a) and (b) (ii) (aa)

This information is not yet available as the 2021/22 financial year only ends on 31 March 2022.

(2)(a) and (b) (i) (bb) 

This information is not yet available as the 2020/21 financial year for municipalities only ends on 30 June 2021.

(2) (a) and (b) (ii) (bb)

This information is not yet available as the 2021/22 municipal financial year has not yet ended.