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

520 Alta Fölscher
departmental performance and plans. An important reform in 2002 was the
publication of measurable objectives for each program in the Estimates of
National Expenditure. Therefore, the document effectively serves to coordinate
coherent planning (and information) from departments, because they are
called to account in Parliament for their chapters. Departments are required
to set out what their main objectives are, what strategies they will be deploying
to achieve them, and how they intend to finance these strategies within
their budget allocations. They also review their past performance, both
financially and in terms of achieving objectives.
The Division of Revenue Bill details the respective shares of the three
spheres of government in nationally raised revenue and, together with the
Intergovernmental Fiscal Review, is the key public document in the intergovernmental
system. It sets out how the provincial and municipal shares
are to be divided horizontally; details conditional grants to the two subnational
spheres; and provides for various procedural matters regarding the
management of intergovernmental finances and the responsibilities of treasuries,
accounting officers (individuals responsible for financial management
in government departments and public entities), and the auditor general. It
also legislates a number of rules of cooperative governance, including what
must happen if actual revenue falls short of anticipated revenue, under
which circumstances allocations to subnational governments may be withheld
or delayed or a payment schedule changed, and how funds may be
reallocated from one horizontal unit of government to another. Finally, it
determines sanctions and consequences for individuals if the provisions of the
bill are not met. The annexes to the bill include a framework analysis of each
conditional grant, detailing its conditions, rationale, criteria for allocation,
monitoring mechanisms, past performance, allocations, projected life, and
payment schedule. This framework is published to provide clarity and certainty
regarding the complex system of conditional grants to stakeholders,
as well as for budget implementation and monitoring purposes.
Departments are expected to report in terms of the Division of Revenue
Bill and its schedules, covering both financial and nonfinancial performance.
The auditor general audits compliance with the bill in both the
transferring national departments and the receiving provincial departments
and municipalities.
In the intergovernmental system, the Division of Revenue Bill is
supported by the annual Intergovernmental Fiscal Review, first published in
1999, which is a compilation of expenditure and service delivery trends and
financial issues in the nine provincial governments and local government.
The review is annual and provides invaluable overall information on provincial
service delivery achievements and obstacles. Similar to other public