Kingdom of Swaziland. Public Finance Management Bill

Transcription

1 Kingdom of Swaziland Public Finance Management Bill CHAPTER ONE: INTERPRETATION, OBJECT, APPLICATION AND AMENDMENT OF THIS ACT 1 Short title This Act may be cited as the Public Finance Management Act Definitions of terms In this Act, unless the context otherwise indicates - accounting standards means the International Public Sector Accounting Standards issued by the International Federation of Accountants, as promulgated appropriate to Swaziland from timeto-time by the Minister; Annual Appropriation Act means the Act of Parliament which must annually be enacted in terms of section 200 of the Constitution; approved budget means, in the case of entities receiving an appropriation in the Appropriation Act, its vote, or in the case of other entities to which the Act applies, the annual budget of the entity approved by its governing board, council or committee or in the absence of such arrangements, the responsible Cabinet Minister; Cabinet Minister" means a member of the Cabinet who is the political head for a ministry, department or agency or public enterprise, or a regional administrator who is the political head for the Region; conflict of interest means circumstances in which the personal interest of any official of an entity to which this Act applies might benefit, directly or indirectly, from their official actions. Consolidated Fund means the fund created in terms of section 198(1) of the Constitution, and all amounts of credit held in any bank account authorized by the Minister to facilitate the operation of the Consolidated Fund as envisaged under the Constitution and this Act control in relation to a public enterprise, means the ability to exercise any of the following powers to govern the financial and operating policies of the enterprise in order to obtain benefits from its activities: o To appoint or remove all, or the majority of, the members of that enterprise s board of directors or equivalent governing body; o to appoint or remove that enterprise s chief executive officer; o to cast all, or the majority of, the votes at meetings of that board of directors or equivalent governing body; or o to control all, or the majority of, the voting rights at a general meeting of that enterprise; controlling officer means a person mentioned in clause 22; direct charge means an amount that can be withdrawn in terms of the law from the Consolidated Fund without an appropriation; financial year means a year ending 31 March; financial statements means statements consisting of at least - o a balance sheet; o an income statement; o a cash-flow statement o any other statements that may be regulated by the Minister; and o any notes to these statements; fruitless and wasteful expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised; irregular expenditure means expenditure, other than unauthorised expenditure, that is not in accordance with a requirement of any applicable legislation or regulation; 1 of 17

2 heads of expenditure means the main categories into which a vote is divided and which - o specifies the total amount which is appropriated for spending under each category; and o is approved by Parliament as part of the vote; grant agreement means any agreement with donors and other organisations or individuals which has any reciprocal implications, or potential reciprocal implications, on the Government of Swaziland; local government authority means the entities created to give effect to section 219 and 220(1) of the Constitution, required to ensure in terms of section 221(1) of the Constitution, the efficient management and development of the local government area under its jurisdiction in consultation with local traditional authority where applicable Minister means the Minister of Finance; overspending o in relation to a vote, means when expenditure under the vote exceeds the amount appropriated for that vote; or o in relation to heads of expenditure, means when expenditure under a head of expenditure exceeds the amount appropriated for that head of expenditure, subject to the impact of virement in terms of section 27; public enterprises means an organ of state established through an Act of Parliament and under the control of the Swaziland Government, public fund means any other fund established for a specific purpose by an Act of Parliament, or in terms of section 14 of this Act; regional administrator means the person appointed by the King on the advice of the Minister responsible for tinkhundla in section 83(2) of the Constitution regional council means the four Regional Councils consisting of persons nominated by each inkhundla in that Region from among the Bucopho members in the Region, in terms of section 82(3) of the Constitution ; regulate means regulate by process of regulation as practiced by the Swaziland Government from time to time; this Act includes any regulations issued under this Act; trading entity means an entity operating within the administration of a ministry, department or agency for the provision or sale of goods or services, and established with the approval of the Minister; unauthorised expenditure means - o overspending of the approved budget of an entity to which this Act applies; o expenditure not in accordance with the legal mandate or purpose of the entity to which this Act applies; vote means the heads of expenditure contained in the estimates for a financial year (other than expenditure charged upon the Consolidated Fund in terms of this Constitution or any other law) into which an Appropriation Act is divided and which - o o specifies the total amount which is appropriated to an entity to which this Act applies; and is separately approved by Parliament before it approves the relevant draft Appropriation Act as such. 3 Object The object of this Act is to secure transparency, accountability, and sound management of the revenue, expenditure, assets and liabilities of the entities to which this Act applies. 4 Entities to which the Act applies (1) This Act applies to - a. ministries, departments or agencies receiving appropriation as votes or withdrawing from the Consolidated Fund through direct charges; b. trading entities of such ministries, departments or agencies; c. other public funds; d. local government authorities; 2 of 17

3 e. public enterprises, except those already listed under the Public Enterprises (Control and Monitoring) Act, 1989 as amended; f. regional councils, subject to subsection (2); and g. Parliament, subject to subsection (3). (2) To the extent that a provision of this Act applies to a Regional Council, any controlling and supervisory functions of the Minister in terms of that provision are performed by the Regional Administrator. (3) To the extent that a provision of this Act applies to Parliament, any controlling and supervisory functions of the Minister in terms of that provision are performed by the Speaker of the National Assembly, or the President of the Senate. 5 Precedence In respect of the object of this Act, any inconsistency between this Act and any other legislation issued under the Constitution, this Act will prevail. 6 Manner in which amendments may be made Draft legislation directly or indirectly amending this Act, or providing for the enactment of subordinate legislation that may conflict with this Act, may be introduced in Parliament - a. by the Minister only; or b. only after the Minister has been consulted on the contents of the draft legislation. CHAPTER TWO: THE CONSOLIDATED FUND, OTHER PUBLIC FUNDS AND CASH MANAGEMENT ARRANGEMENTS 7 Control of Consolidated Fund (1) The Minister is in charge of the Consolidated Fund and must enforce compliance with the provisions of sections 198 and 199 of the Constitution. (2) Draft legislation that provides for a withdrawal from the Consolidated Fund as a direct charge against the Fund, may be introduced in Parliament only after the Minister has been consulted and has consented to the direct charge. (3) The Minister must ensure that there is at all times sufficient money in the Consolidated Fund. 8 Cash management arrangements, including banking and investments (1) The Minister must establish through regulation appropriate and effective cash management, banking and investment arrangements for the Consolidated Fund and entities to which this Act applies. (2) Entities to whom this Act applies may only open bank accounts after having received written authorization by the Minister. (3) The Minister may authorize, in consultation with the Central Bank as sole custodian of public funds in terms of section 206 (2) (b) of the Constitution, the investment of moneys standing to the credit of the Consolidated Fund with a bank or banks either at call or with a reputable money market fund, subject to notice not exceeding twelve months. 3 of 17

4 9 Deposits by the Swaziland Revenue Authority (1) The Swaziland Revenue Authority must promptly deposit into the Consolidated Fund all net taxes, levies, duties, fees and other moneys collected by it for the Consolidated Fund, in accordance with cash management and banking regulations determined by the Minister. (2) The Swaziland Revenue Authority may withhold against gross receipts of money for the Consolidated Fund such amounts needed - a. to refund any tax, levy or duty credits or any other charges in connection with taxes, levies or duties; b. to make other refunds incorrectly credited to the Consolidated Fund; c. to transfer to the Southern African Customs Union any money collected on its behalf. 10 Revenue or other monies excluded from deposits into the Consolidated Fund (1) All revenue or other monies raised or received for the purposes or on behalf of the Government; and any other monies raised or received in trust for, or on behalf of the Government must be paid into the Consolidated Fund, except money received by - a. A public fund, established under section 14 by the Minister, to support the operation of a local government authority, provided that the money is received from its own revenue base in the ordinary course of operations; b. public enterprises, listed in the Public Enterprises (Control and Monitoring) Act, 1989 as amended; c. a trading entity, if the money is received in the ordinary course of operating the trading entity; d. a ministry, department or agency in trust for a specific person or category of persons; e. a ministry, department or agency authorised through regulation in terms of this Act by the Minister to retain funds for the purposes of defraying the expenses of that ministry, department or agency; f. other public funds established under section 14 of this Act by the Minister. (2) Draft legislation that excludes money from payment into the Consolidated Fund may be introduced in Parliament only after the Minister has been consulted on the reasonableness of the exclusion and has consented to the exclusion. 11 Withdrawals from the Consolidated Fund The Minister must enforce compliance with the provisions of section 199 of the Constitution for withdrawals from the Consolidated Fund. 12 Withholding of appropriated funds The Minister may withhold from an entity to which this Act applies any remaining funds appropriated for a specific function - a. if that function is transferred to another entity to which this Act applies; and b. must allocate those remaining funds to that other entity to which this Act applies. 13 Use of funds in emergency situations (1) The Minister may authorise the transfer of funds from the Consolidated Fund to the Contingency Fund to defray expenditure as envisaged in section 203 of the Constitution. 4 of 17

5 (2) The combined amount of any authorisations in terms of subsection (1) may not exceed one per cent of the total amount appropriated in the annual national budget for the current financial year. (3) An amount authorised in terms of subsection (1) is a direct charge against the Consolidated Fund. (4) An amount authorised in terms of subsection (1) must - a. be reported to Parliament and the Auditor-General within 14 days, and b. be attributed to a vote. 14 Procedures for the establishment of other public funds (1) Other public funds required for a specific purpose, as referred to under section 198(2)(a) must be established in concurrence with the House through regulation by the Minister. (2) Unless otherwise determined in an Act of Parliament, the Minister by regulation must determine the authority and procedures for funding and withdrawal of monies from any such public funds of Swaziland. CHAPTER THREE: FUNCTIONS OF THE MINISTER OF FINANCE 15 Functions of the Minister of Finance In addition to any other functions of the Minister in terms of this Act or any other Act of Parliament, the Minister must - a. promote the government s fiscal policy framework and the co-ordination of macroeconomic policy; b. co-ordinate intergovernmental financial and fiscal relations; c. manage the budget preparation process; d. exercise control over the implementation of the annual budget, including the supplementary budget; e. facilitate the implementation of the annual Appropriation Act; f. monitor the implementation of the budgets of local government authorities; g. promote and enforce transparency and effective management in respect of revenue, expenditure, assets and liabilities of an entity to which this Act applies; and h. perform any other function assigned to the Minister in terms of this Act. 16 Authority of the Minister of Finance In addition to any other authorities of the Minister in terms of this Act or any other Act of Parliament, the Minister - a. must monitor and assess the implementation of this Act, including any regulated norms and standards, by entities to which this Act applies; b. must regulate and enforce uniform public financial management policies, norms and standards, including internationally accepted financial data classification and accounting standards; c. may assist entities to which this Act applies in building their capacity for efficient, effective and transparent financial management, including public procurement; d. may investigate any system of financial management and internal control in any entity to which this Act applies; e. must regulate and enforce uniform public procurement policies, norms and standards; f. must intervene by taking appropriate steps to address a serious or persistent material breach of this Act or regulations issued under this Act; and 5 of 17

6 g. may do anything further in terms of the law necessary to perform the functions mentioned in section Annual consolidated financial statements (1) The Minister must - a. produce consolidated financial statements in accordance with internationally accepted financial data classification and public sector accounting standards for each financial year in respect of - (i) all revenue and other monies deposited, withdrawn, invested or advanced through the Consolidated Fund; (ii) direct charges on the Consolidated Fund; (iii) ministries, departments or agencies receiving appropriation as votes; (iv) trading entities of such ministries, departments or agencies; (v) other public funds; (vi) local government authorities; (vii) Regional Councils; (viii) Parliament; and (xi) other public enterprises in its control that can meaningfully be consolidated under the applicable accounting standards; b. submit those statements for audit to the Auditor-General within three months after the end of that financial year. (2) The Auditor-General must audit the consolidated financial statements and submit an audit report on the statements to the Minister within three months of receipt of the statements. (3) The Minister must submit the consolidated financial statements and the audit report on those statements within one month of receiving the report from the Auditor-General, to Parliament. (4) The consolidated financial statements must be made public when submitted to Parliament. (5) If the Minister fails to submit the consolidated financial statements and the Auditor-General s report on those statements to Parliament within seven months after the end of the financial year to which those statements relate - a. the Minister must submit to Parliament a written explanation setting out the reasons why they were not submitted; and b. the Auditor-General may issue a special report on the delay. 18 Establishment of accounting and reporting standards (1) The Minister must - a. promulgate and give guidance on the international public sector accounting standards to be used by the entities to which this Act applies; and b. perform any other function incidental to advancing financial reporting in the public sector. (2) The Minister may promulgate different standards for different categories of entities to which these standards apply. (3) The standards must promote transparency in and effective management of revenue, expenditure, assets and liabilities of the entities to which these standards apply. 19 Financial statistics and aggregations The Minister must annually also compile and publish in accordance with international standards, financial statistics and aggregations concerning all spheres, functions and Government entities. 6 of 17

7 20 Delegations by the Ministry of Finance (1) The Minister may in writing delegate any of functions or authorities entrusted to the Minister in terms of this Act to the head of an entity controlled by the Minister. (2) The head of an entity to whom a delegation in terms of subsection (1) has been made may further sub-delegate in writing to the holder of a specific post in that entity. (3) Such delegation does not divest the Minister of the responsibility concerning the exercise of the delegated power or the performance of the assigned duty. (4) The Minister may confirm, vary or revoke any decision taken by the head of an entity in terms of subsection (1), subject to any rights that may have become vested as a consequence of the decision. CHAPTER FOUR: ENTITIES TO WHICH THIS ACT APPLIES AND, RESPONSBLITIES OF CONTROLLING OFFICERS AND CABINET MINISTERS 21 Schedule of entities to which the Act applies The Minister shall each year publish a schedule of entities to which this Act applies. 22 Appointment of Controlling Officers and acting Controlling Officers (1) Every entity to which this Act applies must have a controlling officer at all times. (2) Subject to subsection (3) the administrative head of an entity to which this Act applies will normally be the controlling officer; (3) In the case of a vacancy, the Minister may temporarily and in consultation with the responsible Cabinet Minister, approve in writing that a person other than the person mentioned in subsection (2) be the controlling officer; (4) The Minister may at any time withdraw in writing an approval in terms of subsection (3). (5) The employment contract of a controlling officer must be in writing and the provisions of clauses 23 to 26 are regarded as forming part of each such contract. 23 General responsibilities of controlling officers (1) The controlling officer of an entity to which this Act applies must ensure that - a. the entity has and maintains - i. effective, efficient and transparent systems of financial and risk management and internal control; ii. a system of internal audit under the control and direction of an audit committee as regulated in terms of sections 49 and 50; iii. a system for properly evaluating all major capital projects prior to a final decision on the project; iv. systems to ensure authorised, effective, efficient, economical and transparent use of the resources of the entity; b. must take effective and appropriate steps to - i. collect all money due to the Government or the entity; ii. implement the approved budget; 7 of 17

8 iii. prevent and report as regulated by the Minister any unauthorised, irregular and fruitless and wasteful expenditure and other losses resulting from criminal conduct; iv. implement, to the extent that funds are approved, recommendations on internal and external audit findings; and v. manage available working capital efficiently and economically; c. is responsible for the management, including the safeguarding and the maintenance of the assets, and for the management of the liabilities, of the entity; d. must settle all contractual obligations and pay all money owing, within the regulated or agreed period; e. must take effective and appropriate disciplinary steps and steps to recover losses against any official in the service of the entity, who contravenes or fails to comply with a provision of this Act or who caused unauthorised, fruitless and wasteful or irregular expenditure; f. when transferring funds in terms of the annual Appropriation Act, must ensure that the provisions of that Act are complied with; g. before transferring grants to an entity outside Government, must obtain a written assurance from the entity that it implements or undertakes to implement effective, efficient and transparent financial management and internal control systems; h. must enforce compliance with any regulations if the entity gives financial assistance to any other entity; i. must enforce compliance with any agreements and regulations issued by the Minister regarding moneys or other assets held in trust for any other entity or person; j. must take into account all relevant financial considerations, including issues of propriety, regularity and value for money, when policy proposals affecting the controlling officer s responsibilities are considered, and when necessary, bring those considerations to the attention of the responsible Cabinet Minister; k. must promptly consult and seek the prior written consent of the Minister on any new entity which the entity intends to establish or in the establishment of which it took the initiative. (2) A controlling officer may not commit his or her entity to any liability for which money has not been duly authorised or appropriated as may be applicable. (3) A Controlling Officer may not enter into any grant agreement without the prior written consent of the Minister of Finance. 24 Controlling officers responsibilities relating to budgetary control (1) Controlling officers of all entities to which this Act applies must see to it that the entity has an approved budget for each financial year. (2) The controlling officer of an entity to which this Act applies is responsible for ensuring that - a. effective and appropriate steps are taken to prevent unauthorised expenditure; and b. effective and appropriate steps are taken to prevent fruitless and wasteful or irregular expenditure. (3) In the case of ministries, departments or agencies receiving appropriation as votes or withdrawing from the Consolidated Fund through direct charges, the controlling officer, for the purposes of subsection (2)(a), must - a. report to the Cabinet Minister and the Minister any impending - i. under collection of revenue due; ii. shortfalls in budgeted revenue; and iii. over or under spending of the entity s approved budget; and b. comply with any remedial measures imposed by the Minister in terms of this Act to prevent over or under spending. 25 Controlling officers reporting responsibilities (1) The controlling officer of an entity to which this Act applies - 8 of 17

9 a. must ensure that full and proper records of the financial affairs of the entity are kept in accordance with norms and standards regulated by the Minister; b. must produce financial statements for each financial year in accordance with accounting standards promulgated by the Minister; c. must submit those financial statements within two months after the end of the financial year to - i. the Auditor-General for auditing; and ii. the Ministry of Finance to prepare annual consolidated financial statements in terms of section 17; d. must submit within five months of the end of a financial year to the Cabinet Minister and Ministry of Finance - i. an annual report on the activities of that entity during that financial year; ii. the audited financial statements for that financial year; and iii. the Auditor-General s report on those financial statements; e. is responsible for the submission by the entity of all reports, returns, notices and other information to Parliament, a Cabinet Minister, the Minister or the Auditor-General, as may be required by this Act. (2) The Auditor-General must audit the financial statements referred to in subsection (1) (b) and submit an audit report on those statements to the controlling officer within two months of receipt of the statements. (3) The annual report and audited financial statements referred to in subsection (1) (d) must - a. fairly present the state of affairs of the entity, its business, its financial results, its performance against predetermined objectives and the approved budget and its financial position as at the end of the financial year concerned; and b. include particulars of i. any material losses through criminal conduct, and any unauthorised expenditure, irregular expenditure and fruitless and wasteful expenditure, that occurred during the financial year; ii. any criminal or disciplinary steps taken as a result of such losses, unauthorised expenditure, irregular expenditure and fruitless and wasteful expenditure; iii. any material losses recovered or written off; and c. any other matters that may be regulated. (4) The controlling officers of ministries, departments or agencies receiving appropriation as votes or withdrawing from the Consolidated Fund through direct charges must - a. each year before the beginning of a financial year provide the Minister in the regulated format with a breakdown per month of the anticipated revenue and expenditure of that entity for that financial year; and b. each month submit information in the regulated format on actual revenue and expenditure for the preceding month and the amounts anticipated for that month in terms of paragraph (a); and c. within 15 days of the end of each month submit to the Minister and the Cabinet Minister responsible for that entity - i. the information for that month; ii. a projection of expected expenditure and revenue collection for the remainder of the current financial year; and iii. when necessary, an explanation of any material variances and a summary of the steps that are taken to ensure that the projected expenditure and revenue remain within budget. (5) If a controlling officer is unable to comply with any of the responsibilities determined for controlling officers in this clause, the controlling officer must promptly report the inability, together with reasons, to the Cabinet Minister and the Minister. 9 of 17

10 26 Controlling officers responsibilities when assets and liabilities are transferred (1) When assets or liabilities of an entity to which this Act applies are transferred to another entity in terms of legislation or following a reorganisation of functions, the controlling officer of the transferring entity must - a. draw up an inventory of such assets and liabilities in the regulated format; b. provide the controlling officer of the receiving entity with substantiating records, including personnel records of staff to be transferred. (2) Both the controlling officer of the transferring entity and the controlling officer of the receiving entity must sign the inventory when the transfer takes place. (3) The controlling officer of the transferring entity must file a copy of the signed inventory with the Minister and the Auditor-General within 14 days of the transfer. 27 Virement The Minister may by regulation determine the authority of controlling officers of ministries, departments or agencies receiving appropriation as votes for virement or the reallocation of appropriated funds within a vote 28 Assignment of powers and duties by controlling officers (1) The controlling officer of a entity to which this Act applies may in writing delegate any of the powers and duties entrusted or delegated to the controlling officer in terms of this Act, to an official in that entity. (2) A delegation to an official in terms of subsection (1) - a. is subject to any limitations and conditions regulated in terms of this Act or as the Minister may impose; b. may either be to a specific individual or to the holder of a specific post in the relevant entity; and c. does not divest the controlling officer of the responsibility concerning the exercise of the delegated power or the performance of the assigned duty. (3) The controlling officer may confirm, vary or revoke any decision taken by an official as a result of a delegation or instruction in terms of subsection (1), subject to any rights that may have become vested as a consequence of the decision. 29 Responsibilities of other officials An official of an entity to which this Act applies a. must ensure that the system of financial management and internal control established for that entity is carried out within the area of responsibility of that official; b. is responsible for the effective, efficient, economical and transparent use of financial and other resources within that official s area of responsibility; c. must take effective and appropriate steps to prevent, within that official s area of responsibility, any unauthorised expenditure, irregular expenditure and fruitless and wasteful expenditure and any under collection of revenue due; d. must comply with the provisions of this Act to the extent applicable to that official, including any delegations and instructions in terms of section 28; and e. is responsible for the management, including the safeguarding, of the assets and the management of the liabilities within that official s area of responsibility. 10 of 17

11 30 Financial responsibilities of Cabinet Ministers (1) Cabinet Ministers must perform their functions in relation to entities to which this Act applies within the limits of approved budgets. (2) In performing their statutory functions Cabinet Ministers must also consider the monthly reports submitted to them in terms of section 25 (4) (c). (3) The Cabinet Minister responsible for an entity to which this Act applies must table in Parliament- a. the annual report, financial statements and audit report referred to in section 25 (1) (d), within one month after receipt of the same from the controlling officer; and b. the findings of a disciplinary board, and any sanctions imposed by such a board, which heard a case of financial misconduct against a controlling officer in terms of section 53. (4) The annual report, financial statements and audit report referred to in section 25 (1) (d) must also be made public when submitted to Parliament. (5) If a Cabinet Minister fails to table in Parliament, in accordance with subsection (3) (a) the annual report and financial statements and the audit report on those statements, within six months after the end of the financial year to which those statements relate - a. the Cabinet Minister must table a written explanation in Parliament setting out the reasons why they were not tabled; and b. the Auditor-General may issue a special report on the delay. 31 Ministerial directives having financial implications (1) Any directive by the Minster or a Cabinet Minister to a controlling officer having financial implications must be in writing. (2) If implementation of the directive is likely to result in unauthorised expenditure, the controlling officer will be responsible for any resulting unauthorised expenditure unless the controlling officer has informed the Minister or Cabinet Minister in writing of the likelihood of that unauthorised expenditure. (3) Any decision of the Minister or Cabinet Minister to proceed with the implementation of the directive, and the reasons for the decision, must be in writing, and the controlling officer must promptly file a copy of this document with the Minister and the Auditor-General. CHAPTER FIVE: NATIONAL AND LOCAL GOVERNMENT BUDGETS 32 Annual appropriations (1) Parliament must appropriate expenditure for Swaziland for each financial year in terms of section 200 of the Constitution. (2) The Minister must submit the annual national budget to Parliament in accordance with the regulations and other requirements of section 200 of the Constitution. 33 Budget principles The Minister must, through regulation, determine the fiscal framework, budget periods, formats, classifications, other information, process and disclosure required to submit a budget for annual appropriation in conformance with internationally accepted government budgeting practices. 11 of 17

12 34 Budgets of local government authorities (1) For purposes of section 219(2) of the Constitution and to determine the impact of local government funding requirements on the fiscal framework under section 33 of this Act, the Minister must, in consultation with Cabinet Minister for Local Government and the Electoral and Boundaries Commission, define and regulate criteria and interventions to ensure economic sustainability of local government authorities to be established or maintained. (2) For purposes of section 223 of the Constitution, a local government authority must recommend, to the extent that the necessary cost of its allocated functions may by exception exceed its own revenue sources, an annual funding request for submission to the Cabinet Minister responsible for local government, in accordance with the budget principles regulated under section of this Act. (3) For purposes of section 221 and 223 of the Constitution, funding requests by local government authorities are to be decided within the Government s fiscal framework with due consideration to their funding sources, affordability of designated functions, equity, expenditure efficiency and results to be achieved in Swaziland. (4) Funds approved for subvention in terms of subsection (3) above, will be appropriated on the vote of the ministry responsible for local government. (5) For purposes of subsection (3) above, the Minister may in consultation with the Cabinet Minister responsible for local government, through regulation, determine criteria, formula and any other means to decide on funding requests by local government authorities. (6) Local government authorities must establish a process to approve and disseminate their total annual budgets, including subvention received under this chapter. 35 Expenditure before annual budget is approved (1) If the national annual budget is not appropriated before the start of the financial year to which it relates, funds may be withdrawn in accordance with section 202 of the Constitution. (2) If the budget of a local government authority is not approved before the start of its financial year and the Cabinet Minister responsible for local government considers that there is an urgent need to incur the expenditure, the Minister may authorise the withdrawal of moneys from the public funds of the local government authority for the purpose of meeting expenditure necessary to carry on the services of the local government authority until the expiration of four months from the beginning of that financial year or the coming into operation of its approved budget, whichever is the earlier. The expenditure so authorised shall not exceed one quarter of the approved budget of the local government authority in the preceding year. 36 Supplementary estimates The Minister may table supplementary estimates in Parliament in accordance with section 201 of the Constitution. 37 Publishing of reports on budget execution (1) Within 30 days after the end of at least every quarter, the Minister must publish in the Government Gazette a statement of actual revenue and expenditure of the Consolidated Fund. (2) Within 30 days after the end of at least every quarter, the Minister in consultation with the Cabinet Minister responsible for local government, must publish in the Government Gazette a statement of actual revenue and expenditure by local government authorities. 12 of 17

13 38 Unauthorised, fruitless and wasteful and irregular expenditure of ministries, departments or agencies receiving appropriation as votes (1) Unauthorised expenditure of ministries, departments or agencies receiving appropriation as votes does not become a charge against the Consolidated Fund except when Parliament approves an additional amount for that vote which covers the unauthorised expenditure. (2) If Parliament does not approve in terms of subsection (1) an additional amount to cover the unauthorised expenditure, it is to be recovered in terms of regulations issued by the Minister for the management of losses and claims. (3) Fruitless and wasteful and irregular expenditure brought to the attention of the controlling officer, Cabinet Minister or Minister is to be recovered in terms of regulations issued by the Minister for the management of losses and claims. 39 Unfunded mandates Draft legislation that assigns an additional function or power to, or imposes any other obligation on an entity to which this Act applies, must, in a memorandum that must be introduced in Parliament with that legislation, give a projection of the financial implications of that additional function, power or obligation. Chapter Six: Loans, Borrowings and Guarantees 40 Restrictions on borrowing, guarantees and other commitments (1) An entity to which this Act applies may not borrow money or issue a guarantee, indemnity or security, or enter into any other transaction that binds or may bind that entity or the Government to any future financial commitment, unless such borrowing, guarantee, indemnity, security or other transaction - a. is authorised by section 204 of the Constitution, and this Act; b. in the case of public enterprises to which this Act applies, is also authorised by other legislation not in conflict with this Act. (2) A public enterprise authorised to borrow money - a. must annually submit to the Minister a borrowing programme for the year; and b. may not borrow money in a foreign currency above a regulated limit, except when that public enterprise is a company in which the state is not the only shareholder. 41 Consequences of unauthorised transactions If a person or entity, otherwise than in accordance with this section, lends money to an entity to which this Act applies or purports to issue on behalf of such an entity a guarantee, indemnity or security, or enters into any other transaction which purports to bind such an entity to any future financial commitment, the state and that entity are not bound by the lending contract or the guarantee, indemnity, security or other transaction. 42 Purposes for which Minister may borrow money The Minister may borrow money in terms of section 204 of the Constitution for the following purposes only - 13 of 17

14 a. To finance national budget deficits; b. to refinance maturing debt or a loan paid before the redemption date; c. to maintain credit balances on a bank account of the Consolidated Fund to fund the cash requirements of the approved budget; d. to advance monies to finance public enterprises in accordance with the limit approved annually by the Cabinet; e. to provide finance to Government employees in terms of approved schemes and to the extent and in the amounts not exceeding the limits authorised by Cabinet and published in the Government Gazette by the Minister from time to time; or f. any other purpose approved by Parliament by special resolution. 43 Signing of loan agreements Except for borrowings by issuance of bills and bonds in local currency in the domestic market, the Minister may only sign loan agreements after complying with section 204 (3) (a) of the Constitution. 44 Management of public debt a. Interest and capital repayments of loans shall be made in accordance with section 205 of the Constitution. b. Public debt shall be managed in accordance with the following objectives - i. To continuously meet the approved funding needs of the Government; ii. to minimize the cost of debt over a long term perspective; iii. to mitigate risks in the debt portfolio to an an acceptable level; and iv. to promote the development of the Swazi domestic debt market. c. The Minister must annually present to Cabinet a debt management strategy consistent with the aims of monetary policy to achieve the objectives in subsection (b) above. d. The Minister must provide, as part of the annual budget required in terms of section 200 of the Constitution, Parliament with an overview of the extent and composition of government borrowing and guarantees, and an assessment of debt management activities against the objectives stated in subsection (b) above. 45 Repayment, conversion and consolidation of borrowings The Minister may, on such terms and conditions as Parliament may determine, and, when necessary, with the concurrence of the lender - a. repay any loan prior to the redemption date of that loan; b. convert the loan into any other loan, or c. consolidate two or more loans into an existing or new loan. 46 Loans from the Consolidated Fund or other public funds An entity to which this Act applies may not lend money or issue a guarantee, indemnity or security, or enter into any other transaction that binds or may bind that entity or the Government to any future financial commitment, unless such loan, guarantee, indemnity, security or other transaction - a. is authorised by section 204 of the Constitution, and this Act; b. in the case of public enterprises to which this Act applies, is also authorised by other legislation not in conflict with this Act. 47 Public Private Partnerships (1) Only a Controlling Officer may enter into an agreement for a public private partnership on behalf of entities to which this Act applies, and only after prior written approval of the Minister. 14 of 17

15 (2) The Minister may only grant such approval if he or she is satisfied that the proposed public private partnership will: a. provide value for money; b. be affordable for the entity; and c. that it would transfer appropriate technical, operational and financial risk to the private parner. (3) Public private partnership must be executed in conformance with all laws governing public finance of the Government of Swaziland. Chapter Eight: General Finance Matters 48 Additional information to be disclosed Public enterprises, to which this Act applies, shall report and disclose all such information as is required in terms of sections 4 and 7 of the Public Enterprises Control and Monitoring Act, as amended, to the Minister. 49 Finance regulations and instructions (1) The Minister must regulate and establish the extent of application to the different entities to which this Act applies of - a. any matter that must be regulated in terms of this Act; b. the recovery of losses and damages; c. the handling of, and control over, unclaimed funds, trust money and property; d. the writing off of losses of state money or other state assets or amounts owed to the state; e. the cancellation or variation of contracts to the detriment of the state; f. the settlement of claims by or against the state; g. the waiver of claims by the state; h. the alienation, letting or other disposal of state assets; i. fruitless and wasteful, unauthorised and irregular expenditure; j. gifts or donations by or to the state. (2) The Minister may regulate and establish the extent of application of such regulations to the entities to which this Act applies - a. any matter that may be regulated in terms of this Act; b. the establishment of and control over trading entities; c. the improvement and maintenance of immovable state assets; d. the determination of any scales of fees, other charges or rates relating to revenue accruing to, or expenditure from the Consolidated Fund, or any other Fund; e. vouchers or other proofs of receipts or payments, which are defective or have been lost or damaged; f. assets which accrue to the state by operation of any law; g. financial management and internal control; h. the determination of a framework for an appropriate procurement system which is fair, equitable, transparent, competitive and cost-effective; i. the Tender Board and its sub-committees, its appointment and functioning; j. audit committees, their appointment and their functioning; k. internal audit components and their functioning; l. the administration of this Act; and m. any other matter that may facilitate achievement of the objectives of this Act. 50 Audit committees (1) Audit committees and the internal audit function must be established under direction of the Minister for each or a grouping of entities to which this Act applies. 15 of 17

16 (2) An audit committee must consist of at least three persons of whom - a. one must be from outside the public service; b. the majority may not be persons in the employ of the entities assigned to the oversight of the Audit Committee; and c. the chairperson may not be in the employ of the entities assigned to the oversight of the Audit Committee. (3) An audit committee must meet at least twice a year. 51 Departures from finance regulations, instructions or conditions The Minister may on good grounds approve a departure from a finance regulation or instruction or any condition imposed in terms of this Act and must promptly inform the Auditor-General in writing should this happen. 52 Determination of interest rates for loans funded by the Consolidated Fund (1) The Minister, by notice in the Government Gazette, must determine an appropriate interest rate applicable to loans granted from the Consolidated Fund; and (2) An interest rate determined in terms of subsection (1) may differentiate between different categories of loans. Chapter Nine: Financial Misconduct 53 Financial misconduct by officials in entity to which this Act applies (1) A controlling officer for an entity to which this Act applies commits an act of financial misconduct if that controlling officer wilfully or negligently - a. fails to comply with a requirement of sections 23 to 26; and b. makes or permits an unauthorised expenditure, an irregular expenditure or a fruitless and wasteful expenditure. c. fails to take disciplinary action against an official who has been convicted of or has admitted any action that has caused loss to the Government of Swaziland. (2) An official of an entity to which this Act applies to whom a power or duty is assigned in terms of sections 28 and 29, commits an act of financial misconduct if that official wilfully or negligently fails to exercise that power or perform that duty. 54 Applicable legal regime for disciplinary proceedings A charge of financial misconduct against a controlling officer or official referred to in section 53 must be investigated, heard and disposed of in terms of the statutory or other conditions of appointment or employment applicable to that person, and any regulations by the Minister in terms of section Regulations on investigations into financial misconduct (1) The Minister must make regulations prescribing the circumstances, manner and form in which allegations and disciplinary and criminal charges of financial misconduct must be reported to the Minister and the Auditor-General, including - a. particulars of the alleged financial misconduct; and b. the steps taken in connection with such financial misconduct; 16 of 17

17 c. matters relating to the investigation of allegations of financial misconduct; d. the circumstances in which the Minister may direct that disciplinary steps be taken or criminal charges be laid against a person for financial misconduct; e. the circumstances in which a disciplinary board which hears a charge of financial misconduct must include a person whose name appears on a list of persons with expertise in state finances or public accounting compiled by the Minister; f. the circumstances in which the findings of a disciplinary board and any sanctions imposed by the board must be reported to the Minister and the Auditor-General; g. the establishment of a Losses Committee and its role and functions relative to the investigation of financial misconduct under this section; and h. any other matters to the extent necessary to facilitate the object of this Chapter. (2) A regulation in terms of subsection (1) may - a. differentiate between different categories of controlling officers, officials and entities to which this Act applies; and b. be limited in its application to a particular category of controlling officers, accounting authorities, officials or institutions only. 56 Offences and penalties (1) A controlling officer is guilty of an offence and liable on conviction to a fine not exceeding E (to be determined), or to imprisonment for a period not exceeding five years, if that controlling officer wilfully or in a grossly negligent way fails to comply with a provision of sections 23 to 26 and 53 (1) (c). (2) Any person, other than those explicitly authorised to the contrary, who purports to borrow money or to issue a guarantee, indemnity or security for or on behalf of a entity to which this Act applies, or who enters into any other contract which purports to bind a entity to which this Act applies to any future financial commitment, is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding five years. Chapter Ten: Other matters 57 Commencement This Act is called the Swaziland Public Finance Management Act, 2009, and takes effect on 1 April 2010 except for - a. the provisions of section 17, which takes effect on 1 April 2015; b. the provisions of section 4 (1)(e), which takes effect on 1 April 2012; c. the provisions of section 25 (1)(d)(i), which takes effect on 1 April 2015; d. the provisions of section 40 (1)(b), which takes effect on 1 April 2012; e. the provisions of section 40 (2)(b), which takes effect on 1 April 2012; f. those other provisions determined by the Minister by notice in the Government Gazette, which will take effect on a date determined in the notice, but which may not be a date later than 1 April Transitional provisions 59 Repeal of legislation 60 Schedules 17 of 17