Public Sector Governance and Accountability Series: Budgeting and ...

Overview 23
specifies who is responsible for putting in place such procedures, what the
procedures should achieve, what the information and reporting requirements
are, how the procedures are to be overseen, and how compliance is
to be assured. It sets clear sanctions.
Improving the classification system. Since 1997, the underlying budget and
classification structure has been modernized and the chart of accounts
revised. The new system is tailored to South African needs but is compliant
with the Government Finance Statistics Manual (IMF 2001) for easy international
reporting.
Improving budget management for service delivery. South Africa has made
slow progress toward more output-focused budgeting through improved
budget documentation, but it has not succeeded in putting in place a
comprehensive, functional system. Budgeting is still largely focused
on inputs.
The reforms set out above have brought huge benefits, but the reform
process is far from complete. Some areas that were targeted for reform in the
initial vision of a results-oriented, accountable budgeting environment, such
as a fully fledged performance budgeting system, have just not yet been
reached. Other issues, such as performance management and the planning,
budgeting, and reporting links, have been tackled, but progress has been
slow. A key remaining shortcoming of the South African process is that better
processes are still being conducted, but mostly at the center of government.
Penetration to spending ministries and agencies at all levels is less robust,
compromising the benefits from the new system. The question is whether
institutional overload and misalignment of incentives are fundamental
underlying problems preventing progress.
References
IMF (International Monetary Fund). 2001. Government Finance Statistics Manual.
Washington, DC: IMF Statistics Department. http://www.imf.org/external/pubs/
ft/gfs/manual/pdf/all.pdf.
Johnson, H. Thomas, and Robert S. Kaplan. 1987. Relevance Lost: The Rise and Fall of
Management Accounting. Boston: Harvard Business School Press.