PUBLIC FINANCIAL MANAGEMENT MPGA822ET

Transcription

1 PUBLIC FINANCIAL MANAGEMENT MPGA822ET Tutorial Letter Lecturer: Mr C.B. Visser

2 1. INTRODUCTION Welcome to the study of Public Financial Management. We believe that you will not only enjoy the subject, but that you will also find it useful in your particular work environment. If there is one thing South Africa is in dire need of, it is the establishment of efficient and effective public financial management practices for public service delivery. Studying in the field of Public Financial Management is therefore essential. However, knowledge of all the theories pertaining to this field of study is not enough. It is therefore of the utmost importance that you supplement your theoretical studies with observation and research in practice. 2. SYLLABUS This subject will focus on some of the key issues in Public Financial Management as it is being applied in the public sector. You will receive a study guide for this subject, but you are expected to also consult other sources about the subject, especially when you do your assignment. The following textbooks can therefore be recommended when studying this module: Visser, C.B. & Erasmus, P.W The Management of Public Finance: A Practical Guide. Cape Town: Oxford University Press. Pauw, J.C., Woods, G., Van der Linde, G.J.A., Fourie, D. & Visser, C.B Managing Public Money: A system from the south. Sandown: Heinemann. The syllabus for Public Financial Management is as follows: Financial policy interpretation and implementation Linking strategic planning and budgeting Budgetary control Management of revenue and liabilities Risk management Design and assessment of internal control systems Performance measurement and management Financial and performance reporting Procurement management Asset management in the public sector Intergovernmental fiscal relations You are encouraged to consider the following as possible sources of information for the successful completion of your assignment: Suitable articles from magazines and newspapers Interviews Government reports, documents and policies (see MPGA 822 ET / Public Financial Management 2

3 Read newspapers to keep abreast of any activities that directly influence your field of study. Also read subject-related journals such as: Administratio Publico Journal of Public Policy Local Government Digest Public Administration and Development Journal of Public Administration and Management (SAAPAM) 3. OBJECTIVES OF MODULE After you have completed this module, you should be able to: interpret and implement revised or new financial management policies in a department; link the strategic plan of a department with the budget estimates thereof; exercise budgetary control in a main division (programme) of the vote (department); establish and assess the internal control system of a department in collaboration with internal auditors; apply credit control and revenue management measures in a department; institute measures for the proper management of liabilities; exercise risk control and management within a department; direct the development and assessment of internal controls in a department in collaboration with internal auditors; measure and manage the performance of entities within a department; compile financial and performance reports with the assistance of the Chief Financial Officer (CFO) and Finance section; manage the decentralised procurement system; monitor and control the management of assets; and manage the transfer of funds and grants to other spheres of government. 4. ASSIGNMENT There is only one assignment set for this subject. Once your assignment has been evaluated it will be returned to you as soon as possible. MPGA 822 ET / Public Financial Management 3

4 ASSIGNMENT Due Date: 27 SEPTEMBER 2004 Linking strategic planning and budgeting with one another should always be the aim of public managers and financial management practitioners in the public sector. Analyse this statement and describe: how you would ensure that the operational plan and the financial plan of a department is linked; and how you would ensure that the money that a department receive is spend according to the operational plan that was developed. Your assignment should reflect the following: the provisions of the relevant legislation that is considered, especially those of the PFMA include it where relevant (do not write a separate part only on legislation); the use of budget control measures; internal control practices that will be applied; performance and risk management issues that have been taken into account; and the management of revenue and liabilities [100] The assignment counts 40% and the examination 60%. It is therefore important to do well in the assignment and to compile a scientific document. ASSIGNMENT REQUIREMENTS i) General We expect to receive work of high standard from you. The assignment must portray the following: Evidence of thorough research Knowledge about the relevant matter An ability to predict, analyse, interpret, synthesise and evaluate situations and phenomena A thorough insight into financial management MPGA 822 ET / Public Financial Management 4

5 An understanding of the dynamics involved in financial management Please do not provide any sensitive or confidential information. ii) Length The assignment should be between typed pages. iii) Structure/layout The assignment should comply with the following: A suitable title Table of Contents (a list of all the headings and sub-headings used in your assignment) Introduction (explaining your work context and your specific approach) Headings and sub-headings; paragraphs, punctuation marks and text references Conclusion (drawing the project to a close and emphasising the main points without repeating everything) List of References (listing all the sources you referred to in your assignment, in alphabetical order) Acknowledgement of sources When information is directly or indirectly borrowed from sources, the sources must be acknowledged. For the purpose of uniformity you are advised to use the following method where at least the author s name, date of publication and page number must be given in the text, e.g. Dunsire (1999:10). The following are examples of references: When the author s name is part of the sentence, the year and page number follow in round brackets, e.g....this may be, as Dunsire (1999:10) points out... When the author s name is not part of the sentence, it follows in round brackets, together with the year and the page number, e.g....it serves as an unproved fact that management is important (Dunsire,1999:10). When referring to a work written by two authors, give both names. Use the & sign between the two surnames instead of the word and, e.g....recent studies (McNurlin & Sprague, 1998:10) show... Reference to a study guide take the following form: (PU for CHE, MPGA875, 2001:10). An alphabetical list of all the sources you have referred to in your assignment must be included on a separate page at the end of every assignment to indicate which sources were used to answer the assignment. Use relevant and recent sources. MPGA 822 ET / Public Financial Management 5

6 The following is an example of how to set out your List of References: Abedian, I Reserve Bank out of Gear. Financial Mail, 147(6): 53, Jun. 6. Archibald, V Accruals Accounting in the Public Sector. Harlow: Longman in association with the Civil Service College Brown, C.V. & Jackson, P.M Public Sector Economics. Oxford: Blackwell. Coombs, H.M. & Jenkins, D.E Public Sector Financial Management. London: Chapman & Hall. Davis, J.R. & Meyer, C.W Principles of Public Finance. New Jersey: Prentice-Hall. Erasmus, P.W. & Visser, C.B Government Finance: The first step. Kenwyn: Juta. Franzsen, D.G. (red) Owerheidsfinansies in Suid-Afrika. Durban: Butterworth. Gildenhuys, J.S.H Public Financial Management. Pretoria: Van Schaik. Gildenhuys, J.S.H Introduction to the Management of Public Finance: A South African perspective. Pretoria: Van Schaik. Herber, B.P Modern Public Finance. Boston: Irwin. Horn, M.J The Political Economy of Public Administration: Institutional Choice in the Public Sector. Cambridge: Cambridge University Press. Jones, P.C. & Bates, J.G Public Sector Auditing: Practical Techniques for an Integrated Approach. London: Chapman and Hall Jones, R. & Pendlebury, M Public Sector Accounting. London: Pitman. Kraan, D.J Budgetary Decisions: A public choice approach. Cambridge: Cambridge University Press. Lambrecht, I.J Financial Management. Pretoria: Van Schaik. Lyden, F.J. & Miller, E.G Public Budgeting: Programme Planning and Implementation. New Jersey: Prentice-Hall. MPGA 822 ET / Public Financial Management 6

7 McKinney, J.B Effective Financial Management in Public and Nonprofit Agencies: A practical and integrative approach. London: Quorum Books. Miller, G.J Government Financial Management Theory. New York: Marcel Dekker, Inc. Musgrave, R.A. & Musgrave, P.B Public Finance in Theory and Practice. New York: McGraw-Hill. Pauw, J.C., Woods, G., Van der Linde, G., Fourie, D. & Visser, C.B Managing Public Money: A system from the south. Cape Town: Heinemann Pendlebury, M.W. (ed) Management Accounting in the Public Sector. London: Heinemann in association with the Chartered Institute of Management Accountants. Premchand, A Government Budgeting and Expenditure Controls: Theory and Practice. Washington: International Monetary Fund. Rosen, H.S Public Finance. Boston: Irwin. Schutte, H OG wys swak finansiële beheer uit oor Gauteng-behuising. Sake-Beeld, :S10, Mei 7. South Africa (Republic) Exchequer Act 66 of Pretoria: Government Printers. South Africa (Republic) Manual on the Financial Planning and Budgeting System of the State. Pretoria: Department of State Expenditure. Visser, C.B. & Erasmus, P.W The Management of Public Finance: A practical guide. Cape Town: Oxford University Press. It is important to remember that only the sources referred to in your assignment must be listed in your list of references. iv) Assignment cover Please ensure that your name, address and contact details are on the cover of your assignment. v) Assignment planning Answers to the assignment question must be specific and as comprehensive as possible. If you want to quote from sources, acknowledge the relevant sources. However, keep quotations from sources to a minimum and use your own words. MPGA 822 ET / Public Financial Management 7

8 Substantiate all statements/facts with text references and suitable, practical examples. Expand on the subject by drawing on sources other than those listed in this tutorial letter. Remember the following when you compile the assignment: Analyse each question carefully so that you can identify those aspects of the study material that are relevant. Do not latch onto some keyword and think that that is all that is asked. Often more than one facet has to be dealt with. You will realise this if you read the question carefully. Make sure that your answer is directed at the specific question as it has been asked. Do not deal generally with a topic if you have been asked to solve a specific problem. You will only be able to give an exact answer if you first read the question carefully. How to approach the question: Unless otherwise indicated, answers to the assignment questions must be presented in the form of an essay. It has to comply with all the technical requirements. a) Analysing the question: Ask yourself: What is being asked? Then write your answer while constantly keeping the question in mind. Analyse the question systematically on the basis of the following hints: What is the topic? What aspects are involved? b) Selection and arrangement of information: Once you understand the question, you can proceed to selecting relevant information. Draw up a provisional framework. In this way you can decide what aspects can be left out. As you proceed you can change your framework. Avoid repeating yourself. Make summaries of source material in your own words. Make a note of references. In your essay you must constantly acknowledge the sources of your information (by means of text references). References in the text must correlate with the sources listed in the Bibliography. vi) Assignment evaluation Your assignment will be marked according to the following guidelines. Make sure that you adhere to these guidelines in order to obtain the maximum marks. MPGA 822 ET / Public Financial Management 8

9 1. Introduction and Conclusion (15%) Explain topic Explain aims Summarise findings Deductions 2. Technical Care: (15%) References Language and spelling Division/headings Bibliography 3. Insight and Practical Application (40%) Logical reasoning Practical examples 4. Content (30%) Comprehensiveness Research The Golden Threat EXAMINATION GUIDELINES For your convenience, we have included guidelines for the examination to facilitate preparation. 1. Structure of the paper NOTE! This is a closed book examination You are going to write a three hour close book examination. It is therefore important that you familiarize yourself with the content of the study guide. The examination paper will consist of three questions of which you must answer two. Each question counts 50 marks. The total marks of the examination paper is therefore 100 marks. MPGA 822 ET / Public Financial Management 9

10 2. What you can expect Read through the whole study guide and concentrate on the following aspects: The policy formulation and implementation processes and the imperatives for policy formulation that can contribute to successful implementation. The need for flexibility in budgetary control. The legislative requirements for the management of revenue and liabilities. An exposition of the risk management process. The aspects that must be considered in the design of an internal control system. The different components of performance management to provide an overview of performance management from a financial management perspective. The statutory requirements for financial and performance reporting as well as for financial statements. The role-players and structures in public sector procurement as well as the five pillars and norms and standards on which it is based. Asset management, including the following aspects: A description of the term assets The requirement for asset management The asset management process The physical asset strategic plan The principles and implementation of co-operative government and the legislative framework for intergovernmental fiscal relations (IGFR). We wish you success in your studies during this semester! MR RIAAN (C.B.) VISSER RPSAA (IPFA), GIMFO Director: Centre for Excellence in Public Financial Management (CEPFIM) MPGA 822 ET / Public Financial Management 10