1. Ismail Momoniat National Treasury
Financial Administration of Parliament and Provincial Legislatures Bill (FAPPL)
Ismail Momoniat
National Treasury

2. Constitutional Principles
Separation of Powers between Executive and Legislature
Legislature oversees Executive
Executive is accountable to its Legislature
Legislature is NOT accountable to Executive
Legislatures determine and control own internal arrangements and procedures
Salaries, allowances and benefits of permanent members is a direct charge against relevant Revenue Fund

3. Informal Principles
Legislatures need to be exemplary in their practices
Need to be seen to be as good as, or better, than government depts and entities
Legislature and Executive need to co-operate when determining budget, legislation, etc.

4. National Treasury Perspective on FAPPLB
PFMA adequately covers Parliament/ Legislatures
Small problems identified can be sorted out through coming amendments to PFMA
Separate Act will set wrong precedent to other legislatures
Legislatures and entities will all want own legislation
Provincial legislatures and municipal councils not in the public eye as Parliament, less transparent
Conventions of best practice better than legislation
Should not legislate workings of Parliament
BUT formalise as if it is legislation
Objective of uniformity between legislatures

5. Clarifying/Correcting Governance Arrangements in PFMA
Secretary of Parliament is the Accounting Officer under PFMA, accountable to Exec Authority
Executive Authority the 2 Presiding Officers (Speaker of NA and Chairperson of the NCOP acting jointly)
2 presiding officers acting jointly to also perform functions of treasury for Parliament
Fix up PFMA to ensure treasury regulations do not apply to Parliament and legislatures
Remuneration of members currently a direct charge

6. What are reasons for FAPPLB?
FAPLL Bill appears driven by a narrow interpretation of separation of powers
Assumes no engagement with Executive
No engagement is a recipe for bigger problems
Major issue appears to be about budgets
Differentiate between internal process for budgeting in Parliament and what PFMA requires
No clear motivation for why Parliament and legislatures need a separate Act rather than PFMA

7. Budgeting Issues There is ONE national revenue fund
Divided between 3 spheres of govt, with provincial share and debt servicing direct charges
Need for an agreement between Parliament/ legislatures and Executive (thru Minister/MEC of Fin) on budget for Parliament/legislatures
Two types of problems: How much is enough?
Executive cannot abuse its position and force a small budget on a legislature, so it cannot function properly
Legislatures cannot ignore trade-off with service delivery, and needs to ensure its budget is not too generous

8. Budgeting Agreements
First problem can be tackled thru implicit threat that the legislature refuse to pass the budget if Executive is unreasonable
Second problem is dealt with in 2 ways
Commission for Remuneration of PO deals substantially with minimum direct charge allocation
Relevant treasury makes legislature aware of service delivery priorities
Final budget of Parliament and legislatures should be agreed between Presiding Officers and Minister/MEC of Finance
Develop mechanism for dealing with major disagreements

9. Current Budget Problems
No amount of money is enough for any person, department or entity!
How do Parliaments/Legislatures prioritise their budgets?
Staff in Parliament and Provincial Legislatures more highly paid than equivalent members of public service
What is trade-off btw funding researchers and support staff and other services (eg catering)?
Why does Parliament set such rigid internal rules for determining its own budget?
Practice seems to be too rules-driven and bureaucratic
No need for each committee to be treated like a separate dept or vote

10. Comparing Parliament and provincial legislature Budgets
Total budget for Parliament and 9 provincial legislatures R1,46 billion in 2004/05
Nine provincial legislatures with 344 members have a total budget of R677 mil, whilst Parliament with 490 members has budget of R785 million
Parliament spends less on its staff at R193 mil compared to R224 mil by 9 provinces
Parliament spends more on non-personnel expenditure at R395 mil compared to R176 mil by provincial legislatures
Total average cost per member and support staff is higher for Parliament at R , compared to provinces (high R to low R )

11. Problems with Bill
Contains clauses that we want to amend in PFMA (eg irregular exp defn)
Provisions on budget submission out of sync with budget process (eg s13(3))
Are provisions like s14 relevant to a legislature (eg measurable objectives)?
Repeats PFMA and MFMA provisions
Bigger issues like conditions of service of employees not dealt with

12. Conclusions National Treasury’s view is that no need for FAPPL
PFMA already deals with Parliament/Legislatures
Coming amendments to PFMA can fix up any current problems
Internal rules in Parliament on determining its budget needs modernisation
Parliament free to change its main divisions within its vote

13. Legislatures: Exp & Budgets

14. Legislatures: Comp of employees

15. Number of Members

16. Average Annual Costs