1. Overview of the Financial Management of Parliament Bill
Presentation to the Portfolio Committee on Finance
9 May 2006

2. Two overarching principles:
Parliament’s status as an independent branch of government
Constitutional commitment to transparent, accountable and effective administration
Draws on processes and budgetary practices developed by the National Treasury without compromising independence of Parliament
Needs to link into the Budget Process

3. The Bill: Regulates the financial management of Parliament
Provides norms and standards for provincial legislatures for the regulation of their finanicial management

4. Governance model
Speaker and Chairperson jointly constitute the Executive Authority of Parliament
The Executive Authority
is responsible for the financial management of Parliament and
is accountable to Parliament, represented by the ‘joint committee’ established in terms clause 15 and the Public Accounts Commitee.

5. Executive Authority Among other things –
Concludes annual performance agreement with Accounting Officer
Makes regulations and issues policy
Represents Parliament in discussions with Minister of Finance on annual budget
Reports to Parliament, represented by the ‘joint committee’ established in terms of clause 15, and to the Public Accounts Committee

6. Adminstration of the Act
Secretary to Parliament is the accounting officer
Adminsters the Act
Accounts to the Executive Authority
Annual performance agreement
Power to delegate to other parliamentary officials
Fiduciary responsiblities include acting in the best interests of Parliament

7. Roles of Accounting Officer
Must ensure -
Effective, economical and efficient use of resources
Financial records are kept
Effective systems of financial management
Implementation of supply chain management policy
Systems to manage staff performance
Unauthorised expenditure avoided
Disciplinary or criminal action taken when necessary

8. Strategic Plan and Budget
Accounting officer must prepare annually
Submits draft to Executive Authority 10 months before beginning of financial year
Executive Authority -
Submits plan to ‘joint committee’ 10 months before beginning of financial year
Submits budget to ‘joint committee’ 1 month before it has to be submitted to National Treasury
Consults with Minister of Finance
Submits budget to National Treasury
Represents Parliament in discussions with Minster of Finance

9. Accounting Officer - Reporting
In - year reporting:
Monthly and quarterly reports
Mid-year budget and perfomance asessment
End - year reporting:
Financial statements – to Auditor General and National Treasury
Annual report including audited financial statements to Executive Authority
Executive Authority -
tables annual report in Parliament
annual report referred to ‘joint committee’ and to SCOPA

10. Annual Reporting and Auditing
Accounting officer
Financial statements – 2 months after year end
Annual report
5 months after year end
Audited financial statements after 2 months
Auditor-General
Executive Authority
Tables independently
if necessary
Tables in 5 working days
PARLIAMENT
Referred to ‘joint committee’ ‘SCOPA’

11. Chapters on specific matters
Ch1: Interpretation and objects
Ch2: Executive authority and administration of Act
Ch3: Planning and budgeting
Ch4: Cash management and investment
Ch5: Financial management
Ch6: Supply chain management
Ch7: Audit committee and internal audit unit
Ch8: Reporting and auditing
Ch9: Regulations and instructions
Ch10: Financial Misconduct

12. Audit committee Independent, advisory body
Appointed by Executive Authority
Majority of members not in Parliament
Advises Executive Authority and Accounting Officer
Draws up charter to guide internal audit committee
Approves the annual audit plan

13. Internal audit unit Established by Accounting Officer
Is independent and has access to necessary financial informatoin
Does internal audits according to -
an annual plan approved by audit committee and
standards set in terms of the PFMA
Reports to both the audit committee and accounting officer

14. Financial misconduct
Disciplinary proceedings for certain failures of Accounting Officer and other officials
Criminal proceedings for deliberate or grossly negligent breach of certain provisions including –
Expenditure or revenue management
General financial management provisons
Abuse of position
Unauthorised expenditure
False information to Executive Authority or Auditor-General

15. Next Steps Consider whether to extend Bill to:
Provinces
Constitutional Institutions
(doing so would require extensive consultation)
Consider new proposals regarding party funding
Consider comments on Bill from:
Parliament’s administration
National Treasury
Make the necessary amendments
Finalise the Bill

16. The end