Government spending will amount to R6.62 trillion over the next three years. The social wage will take up 59.4 percent of total non-interest spending over this period. The bulk of the spending is allocated to learning and culture in the amount of R1.3 trillion, social development of R1 trillion and debt service costs amounting to R1 trillion.
“That is a lot of spend that needs to comply with financial regulation. A well-functioning financial system is vital for the economy, businesses, and consumers. Financial regulation is part of ensuring the stability, safety and soundness of the financial system,” says Sanet Vos, Head of Product at Sabinet.
The Public Finance Management Act 1 of 1999 (PFMA) plays an important role in regulating the government’s financial controls. The mandate of the PFMA is to regulate financial management in the national government and provincial governments; ensure that all revenue, expenditure, assets and liabilities of those governments are managed efficiently and effectively; and provide for the responsibilities of persons entrusted with financial management in those governments.
“In the 2022 medium-term budget policy statement, the Minister of Finance emphasised that government finances must be equitable, efficient and flexible to support South Africa’s development objectives. Sabinet understands the challenges of ensuring compliance and has introduced an integrated solution for streamlined access to Financial Regulatory Instruments as issued by the South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA),” says Vos.
“This service is beneficial to government officials dealing with government funds. Regulatory instruments are not always disclosed in Government Gazettes which is why Sabinet’s information services ensures full compliance. The regulatory instruments are also linked to relevant legislation,” Vos explains.
The PFMA aims to modernise financial management in the public sector and, in the process, reduce fraud, corruption and waste. More efficient and effective use of public resources will maximise the capacity of government to deliver services. The term “public financial management” commonly describes elements of an annual budget cycle, which comprises budget formulation; budget execution; accounting and reporting; and external security and audit.
The National Treasury’s legislative mandate is also described in the PFMA. The National Treasury is mandated to promote government’s fiscal policy framework; to coordinate macroeconomic policy and intergovernmental financial relations; to manage the budget preparation process; to facilitate the Division of Revenue Act, which provides for an equitable distribution of nationally raised revenue between national, provincial and local government; and to monitor the implementation of provincial budgets.
Sabinet’s consolidated and up-to-date Financial Regulatory Instruments include guidelines, standards and directives, as well as a weekly newsletter with all updates and amendments. With this latest offering from Sabinet, government officials have streamlined access in terms of the latest legislation, rules and regulations.