Presentation on the Joint Standing Committee on Financial Management of Parliament 07 September 2016

Presentation Outline Introduction Mandate of the Joint Standing Committee on the Financial Management of Parliament (JSCFMP) Powers and functions of the JSCFMP Establishment and proceedings of the JSCFMP Guiding principles of JSCFMP Oversight Mechanism of the JSCFMP Conclusion

1. Introduction Section 4 of The Financial Management of Parliament and Provincial Legislature Act, (Act 10 of 2009) provides for the establishment of an Oversight Mechanism in Parliament In terms of this provision a Joint Standing Committee on Financial Management of Parliament was established in terms of Part A of Joint Rules of Parliament. The first meeting took place on the 16th May 2016 when Co-Chairs where Messrs SJ Mohai and VG Smith were elected as Co-Chairs

Constitution of South Africa, 1996; 2. Mandate of the JSCFMP Constitution of South Africa, 1996; The Financial Management of Parliament and Provincial Legislature Act, (Act 10 of 2009) as amended; Joint Rules of Parliament; and Resolution of Parliament as taken by Assembly and Council.

3. Powers and functions of the JSCFMP The Committee has the Powers that Committees have under sections 56 and 69 of the Constitution; The Committee may require the Executive Authority, Accounting Officer and any official of Parliament to appear before it; The Committee maintain oversight of the financial management of Parliament by among other things: Considering Executive Authority directives with financial implications – section 37(5) of the Act; Considering the annual report submitted to Parliament in terms of section 60 of the Act; Considering any Executive Authority instruction that might not be consistent with the Act or its Regulations (s 66 of FMPPLA); Performing any other functions specified in the FMPPLA or by the Rules of Parliament, or consistent with the objects of the Act; and Considering the draft strategic plans in terms of section 17(2) of FMPPLA; Monthly, quarterly and mid-year reports (s 54); . Parliament may by resolution of the Assembly and Council assign any other function, task or duty to the Committee.

3.1 Powers and functions of the JSCFMP (cont.) Powers that Committees have under sections 56 and 69 of the Constitution Summons evidence Require person or institution to report Enforcement of summons or request in terms of Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act Receive petitions, representations and submissions The Committee may thus require the Executive Authority, Accounting Officer and any official of Parliament to appear before it The Act permits specifically that the JSCFMP may require the Accounting Officer or any other official of Parliament to appear before it.

3.2 Powers and functions of the JSCFMP (cont.) Considering Executive Authority directives with financial implications - section 37(5) of the Act – read with section 20 Must be in writing addressed to Accounting Officer Likelihood of unauthorised expenditure – Accounting Officer must inform Executive Authority in writing Further instructions and reasons in writing prior to proceeding with directive that carries this risk – referral to JSCFMP Reasons: expenditure of exceptional nature not provided for in budget and cannot be postponed to future appropriation or approval of funds without serious prejudice to interests of Parliament; or Unforeseen and unavoidable expenditure approved by Parliament Responsibility for unauthorised expenditure – if Accounting Officer proceeded without further instructions Accounting Officer must file copy of instruction with AGSA If unauthorised expenditure not approved – Executive Authority is responsible in personal capacity – see also section 20 JSCFMP may recommend authorisation of such expenditure

3.3 Powers and functions of the JSCFMP (cont.) Considering the annual report submitted to Parliament in terms of section 60 of the Act, including: Audited financial statements Audit report from AGSA Annual performance report Plays role of SCOPA Auditor General (AGSA) may be requested to brief JSCFMP – see s 5(1)(b) of Public Audit Act JCSFMP should consider audit findings JSCFMP should also consider report from Parliament’s Audit Committee Section 48(1)(c): Effectiveness of internal control Quality of financial management Quality of financial statements, performance reporting, and compliance with laws and regulations

3.4 Powers and functions of the JSCFMP (cont.) Considering any Executive Authority instruction (s 66); Instruction must be consistent with the Act or its Regulations Purpose to implement the Act Written instructions Referral to JSCFMP Implementation of Act mostly the function of Accounting Officer, guided by Act and regulations – principle of legality In case of uncertainty or lacuna, Executive Authority issues instruction Role of JSCFMP – consideration – may report.

3.5 Powers and functions of the JSCFMP (cont.) Performing any other functions specified in the FMPPLA or by the Rules of Parliament, or consistent with the objects of the Act Considering the draft strategic plans in terms of section 17(2) of FMPPLA; Monthly, quarterly and mid-year reports (s 54); Approve departures from regulations or condone failure to comply with a regulation (s 65(4));

3.5.1 Powers and functions of the JSCFMP (cont.) Chapter 3 provides for the manner, form and content of the strategic plan, annual performance plan and budget Section 17 provides specifically for process of consultation between Executive Authority and Minister of Finance – separation of powers JSCFMP must consider the drafts of Strategic plan Annual performance plan and draft budget prior to submission to National Treasury (NT) Adjustments budget prior to submission to NT Any draft revisions of approved allocations of Parliament’s own funds JSCFMP should be guided by ATC referral - whether to consider and report, or just report – Act does not make it clear – stands to reason that JSCFMP should report a recommendation whether to approve Budget and adjustments of Parliament. Appropriation Bill does not allocate programmes for Parliament’s Vote. Parliament must do this itself – separation of powers. Executive Authority oversees preparation of strategic plan & APP. Accountable to Parliament for this function. Parliament should consider approving these as well. Role of JSCFMP in this process.

3.5.2 Powers and functions of the JSCFMP (cont.) Monthly, quarterly and mid-year reports (s 54) In-year reporting Useful to analyse trends month to month Ensure oversight of the Accounting Officer against annual performance plan, which sets quarterly targets Quarterly and mid-year reports are performance reports – implementation of APP Mid-year is also a budget report – indicates whether an adjustments budget might be required. Role of JSCFMP – consideration – may report.

3.5.3 Powers and functions of the JSCFMP (cont.) Approve departures from regulations or condone failure to comply with a regulation (s 65(4)); proviso – Objectives of the Act not undermined Objectives are set out in section 2 Transparency, accountability and sound management of revenue, expenditure, assets and liabilities of Parliament Separation of powers and co-operative government Approval of departure or condonation of non-compliance must be recorded in writing and referred to JSCFMP promptly Role of JSCFMP – consideration – may report.

4. Establishment and proceedings of the JSCFMP Composition - 14 members of whom 9 are from the NA (ANC 5, DA 2, EFF 1 and other parties 1) and 5 are from the NCOP; Chairing - Chaired by two co-chairperson one from each House; Quorum – majority of the members from each House constitute a quorum; Committee may however proceed with its business if at least one third of the Members are present but may decide on a question when the meeting quorate; and Decision before the Committee is decided when there is agreement on the question among the majority of the Members.

5. Guiding principles to the JSCFMP No Member may attend a deliberation on a matter in which the member has a material interest; Promoting and maintaining a high standard of professional ethics in the financial management of Parliament; Promoting the efficient, economic, and effective use of resources allocated to Parliament; and Ensuring the transparent, accountable and sound management of the revenue, expenditure, assets and liabilities of Parliament.

6. Oversight mechanisms of the JSCFMP Consideration of the Strategic Plans, APP and Budget Vote of Parliament; Consideration of the monthly, quarterly and mid-year expenditure of Parliament; Performing any other functions specified in the FMPPLA or by the Rules of Parliament, or consistent with the objects of the FMPPLA; and Undertaking oversight visits and study tours when applicable.

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