Home  »  Articles   »   Public Finance Management Amendment Bill Tabled

Articles
Public Finance Management Amendment Bill Tabled

July 10, 2020

Parliament

The Public Finance Management Amendment Bill has been tabled in parliament.

The private member’s bill was drawn up by Ghaleb Cachalia, a Democratic Alliance member of parliament.

Parliament sought comment on the bill in June 2020.

According to the explanatory summary published at the time, the bill aims to “provide for additional measures in instances where the executive authority fails to table an annual report and financial statements of a department or a public entity, and the audit report on those statements, in the National Assembly or the relevant legislature”.

The bill also proposes that the annual report, financial statements, and the audit report on such statements referred to in section 65 of the Public Finance Management Act be tabled within 60 days after a written explanation has been tabled.

Section 65 provides that the executive authority responsible for a department or public entity must, within one month after the accounting officer has received the audit report, table annual reports, financial statements, and the audit report on those statements in the national assembly or provincial legislatures.

According to Cachalia, a shortcoming in the act is that it “does not provide for additional measures in instances where such reports and statements are not tabled, and the department or public entity is not required to table such reports and statements within a specified time-period after a written explanation has been tabled”.

The bill aims to amend the Public Finance Management Act, 1999, so as to:


• provide for additional measures in instances where an executive authority fails to table the annual report, financial statements and relevant audit report for a department or public entity that it is responsible for, in the National Assembly or relevant legislature; and
• provide for matters connected therewith.

The standing committee on finance will process the bill.

Meanwhile, national treasury, during a briefing to a joint meeting of the standing and select committees on finance on its Draft Updated Strategic Plan 2020-2025 and Annual Performance Plan 2020/21, confirmed that a Division of Revenue Amendment Bill and an Adjustments Appropriation Bill will be tabled in parliament in October 2020 during the Medium Term Budget Policy Statement.

This is in addition to the two bills published during the 2020 Supplementary Budget last month.

Treasury also indicated that the Draft Financial Sector Laws Amendment Bill and Draft Financial Sector Related Levies Bill will be tabled in parliament by August 2020.

In a recent statement, treasury indicated that the Draft Financial Sector Laws Amendment Bill is “part of the Twin Peaks reform of the financial regulatory system applicable to the financial sector”.

Cabinet approved the draft bill in June 2020 for tabling in parliament.

In its statement, cabinet pointed out that the draft bill proposes to designate the Reserve Bank (SARB) as the Resolution Authority and strengthens the SARB’s regulatory tools designed to ensure stability of the financial system.

The proposed legislation also aims to introduce South Africa’s first comprehensive deposit insurance scheme that will ensure that depositors are paid their funds when a bank fails.

Some of the acts to be amended include the Insolvency Act, the South African Reserve Bank Act, the Banks Act, the Mutual Banks Act, the Competition Act, the Financial Markets Act and the Insurance Act.

New sections on the cost of resolution of designated institutions, preference in terms of covered deposits, flac instruments and regulatory capital are proposed to be inserted into the Insolvency Act.

In terms of the Financial Sector Regulation Act, it is proposed that detail on the envisaged resolution framework for banks, the designation of the SARB as the resolution authority and the setting up of a deposit insurance scheme be added to the long title.

According to treasury, the Draft Financial Sector Related Levies Bill will propose the collection of levies to ensure that the Prudential Authority, the Financial Sector Conduct Authority and ombuds are sufficiently resourced to carry out their duties and functions.

Treasury also pointed out that the Draft Public Procurement Bill is envisaged to be tabled in 2021 and revised Treasury Regulations are likely to be published for comment in August/September 2020.