Finance Annual Report 2007-2008 - Gauteng Online

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implementation of the FMG conditions framework which in themain funds the Municipal Finance Internship Programme.• Gauteng Municipal Financial Summit – During the 2007/2008period the Province has intensified its support to Gauteng Municipalitiesin addition to the current support framework establishedthrough the Gauteng Municipal Support Plan. The Gauteng MunicipalFinance Summit was co-hosted by Gauteng Treasury andthe Department of Local Government on the 19th July 2007. Thesummit was attended by the MEC for Local Government, SeniorOfficials from both departments, Mayors, MMC’s for Finance,Councillors, Chief Financial Officers and other officials from themunicipalities. Serious deliberations and discussions took placewhich ultimately resulted in resolutions being taken particularlyaround financial management, institutional and governance issues.In an effort to understand the current local governmentmilieu we have through the Gauteng Municipal Finance Summitengagements developed with our municipal counterparts andother key stakeholders in the Province key resolutions that wouldsee us enhancing municipal capacity over the next 2 years. Theseresolutions were tabled at the Premier Coordinating Forum forendorsement and subsequently adopted as a plan of action.PROGRAMME 4Provincial Financial Management and GovernancePurposeThe programme manages the Gauteng Provincial Government’s (GPG)multi-billion operational cash flow and negotiates agreements for bankingservices as well as investing surplus funds on behalf of the GPG tooptimize the Province’s revenue. It is also responsible for compiling consolidatedfinancial statements and submitting them to the Provincial Legislaturefor tabling. Another big focus for the programme is the provisionof support services to the departments in the areas of financial accounting,management of assets and risk management.The programme comprises the following sub programmes:• Assets and Liabilities• Financial Accounting• Risk Management• Fixed Asset ManagementSub ProgrammesAssets and LiabilitiesThe sub-programme is responsible for providing a range of banking activities,cash management and investment of surplus funds in the moneymarket on behalf of GPG. It also looks after the management of theProvincial Revenue Fund as well as managing risks related to funds invested.Financial AccountingIn terms of the Public Finance Management Act (PFMA), PFMG is responsiblefor preparing the consolidated annual financial statements inaccordance with the Generally Recognised Accounting Practices (GRAP).This sub programme is also in charge of preparing annual financial statementsfor the Provincial Revenue Fund, as well as providing guidanceand leadership to the GPG departments in terms of financial accountingpractices.Risk ManagementThe sub programme is responsible for implementing Enterprise wide RiskManagement (ERM) within GPG. This is to ensure that all organisations’risks such as operational, financial, compliance, regulatory and strategic22
GAUTENG TREASURY ANNUAL REPORT • Performance Reportrisks are encompassed in the management of risk in GPG.Asset ManagementThe Public Finance Management Act (PFMA) sets out many principlesthat constitute sound asset management. Many of these principles arenot yet imbedded in the asset management structures of the Public Sector.The major responsibility of this sub programme is to coordinate andguide the Departments across GPG in South Africa to not only comply tothe legislation as set out in the PFMA, but to ensure that asset managementis implemented efficiently and effectively.Key AchievementsAssets and LiabilitiesThe unit worked on strengthening the cash management in departmentsthrough interaction and training of departments. The training was providedon a one to one basis as well as through the cash managementforums that are held monthly. As a result a number of departments managedto achieve the variance of 5% between actual.Expenditure and funds requested was 9 out of 14, however the projectionsvariance still remains a challenge. The cash management systemwas not implemented as National Treasury has placed a moratorium onpurchasing of systems. However a request to purchase the system wassent to National Treasury but a response has not been received fromthem. Through the investments of surplus funds in the money market,the unit has managed to raise interest of R332m against a budget ofR240m and the diversification of the portfolio has always been maintainedas per the investment policy. Furthermore, the bank balanceshave been maintained at an average of R221m a year as a result of malfunctioningof systems in the first half of the financial year.Financial AccountingThe consolidated annual financial statements have not been finalised asyet due to the fact that audited annual financial statements of departmentsare used to compile the consolidated report. They will be preparedin June 2008. The audit opinion will only be known once thesestatements have been submitted to the Auditor General. The same explanationapplies to the Provincial Revenue Fund Financial Statements.Treasury together with the consultants conducted a Finance Function Effectiveness(FFE) exercise for all the departments of GPG. The purposeof this process was to identify which areas within the finance unit needimprovement so that a proper financial management capacity plan canbe introduced. The exercise was carried out for 11 departments.The purchase of the system to assist the unit in processing accountingtransactions of the Provincial Revenue Fund did not go ahead as planneddue to the fact that National Treasury has placed a moratorium on thepurchase of systems. The forums to discuss accounting matters with alldepartments have been run successfully and there has been tremendousimpact on the financial statements of the departments as a result. Theunit also achieved an unqualified audit opinion on the Provincial RevenueFund financial statements for 2005/06 and 2006/07.Risk ManagementDuring the 2007/08 financial year, the Enterprise Wide Risk Management(ERM) Policy for GPG was approved by the Gauteng Treasury HOD andfollowing that the ERM reform was also tabled at the HOD forum toobtain buy-in before the reform could be rolled out. In order to systematicallyimplement the reform, the ERM standards were developed anddistributed to departments. These standards list the main tasks of ERMwhich need to be carried out by all departments in GPG. In order to effectivelyand efficiently implement ERM, risk management forums wereintroduced and they are contributing positively to the effective managementof risk in GPG. Furthermore, training of Chief Risk Officers of thedifferent GPG departments was done to capacitate them and as at theend of 2007/08, only 9 departments had appointed Chief Risk Officers.We also developed the risk charters that govern risk management committees.Presentations on ERM were done at management meetings tocreate awareness on risk management and to obtain buy-in from seniormanagers within the departments. The reporting templates to monitorthe implementation progress of ERM were developed and training wasprovided on them.Asset ManagementAsset management strategy has been successfully implemented by provincialdepartments with the following milestones achieved:• Asset management teams have been established and are operationalin 13 out of 14 departments;• Asset management forums have been established and are operational;• Asset acquisition, maintenance and disposal plans are in place inall 14 departments, 10 are awaiting approval;• Asset policies are in place in all 14 departments;23
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Oversight ReportOversight Report
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1. Service deliveryAll departments
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2. ExpenditureDepartments budget in
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2.4 Salaries, Overtime, Home Owners
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3.3 Employment And Vacancies By Cri
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The following table provides a summ
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5.1 (c) Total annual turnover rates
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5.4 Promotions by critical occupati
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6. Employment EquityThe tables in t
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6.5 Terminations for the period 200
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7.2 Performance Rewards by salary b
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7.4 Performance related rewards (ca
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9. Leave utilisation for the period
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10. HIV/AIDS & Health Promotion Pro
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11.4 Disputes lodged with Councils
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12.2 Training provided 2007/2008Occ
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Outlook for the coming yearOutlook
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and marketing, events management an
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Treasury’s mandate to create a co
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develop Standard Operating Manuals.
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ANNUAL REPORT2007/8 FINANCIAL YEAR
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