Chapter 2 - P rogramme 1 - Department of Defence

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of the SANDF (C SANDF) must be enabled
to execute his statutory financial responsibilities
without compromising the Accounting Officer’s
responsibilities. An investigation was launched
to realign the finance services rendered within
the Chief ’s office. The investigation determined
the regulatory framework governing the
management of finances within Defence and,
consequently, the financial responsibilities in
the SANDF.
Section 45 of the Public Finance Management
Act, 1999 (Act No. 1 of 1999) forms the basis
of the responsibilities. The enablement of
the C SANDF was being realigned from the
provision of budget management services to
multidisciplinary financial services. The Office
of the Chief of Finance for the SANDF has
been structured to provide capacity to the
C SANDF to manage the following areas:
budget preparation, budget control, payments,
governance, risk and compliance, and financial
administration and support. The Minister has
approved this establishment, and the staffing of
this office will be finalised during April 2008.
A new risk management section was established
in the Chief Defence Policy, Strategy and
Planning environment, which is currently
being staffed. The functions and activities
of this section will impact on the resource
risk management section within the Financial
Management Division.
Standard Chart of Accounts
National Treasury revisited the current Standard
Chart of Accounts structure during FY 2007/08
and is in the process of changing it. The aim of
the Standard Chart of Accounts is to provide
the ability to extract more meaningful data for
monitoring Government expenditure. The new
structure consists of various segments in addition
to what is available in the Financial Management
System. During the initial implementation in
FY 2005/06, Defence only implemented the item
| Department of Defence |
Table 2.7 Financial Services Outputs for FY 2007/08
segment through a mapping process (conversion
table). It is the intention of National Treasury to
implement the proposed changes with effect from
1 April 2008. Defence only became aware of
these changes in December 2007. It was agreed
after consultation with National Treasury that the
implications will first be investigated, after which
the feasibility and timescales required to implement
will be communicated to National Treasury.
Defence Update
The Department of Defence approved the
Credible Force Design and Structure in 2007 and
is in the process of finalising the updated Defence
Review. Defence’s allocation has declined over time
compared to the Gross Domestic Product, resulting
in a pressurised Defence Budget including multiple
challenges. The Financial Management Division has
been facilitating the costing process for the Services
and Divisions, and has assisted in developing costing
scenarios and in presenting various options of the
financial requirements of the Department. The
challenge remains to provide a credible Defence
Force with the current deteriorating state of
equipment and facilities and an insufficient resource
base.
Measurable Objective
To provide a cost-effective financial management
service to the Minister of Defence, the Secretary
for Defence and the Chief of the SANDF within
the evolving regulatory framework by means of
a professional, representative civilian financial
management corps and appropriate financial
management system.
Outputs
Details of the Financial Services outputs are
reflected in Table 2.7.
Output Performance Measure Target Actual Achievement
Budget management
service to the
Department of
Defence, as directed
by the Chief Financial
Officer
Cost-effective service
delivery compliance
within the regulatory
framework; sound
financial defence
decisions; unqualified
audit reports
A budget management
service to the
Department according
to the current
regulatory framework
and programme/budget
structure
The Financial Management Division has enhanced
its revenue management system to the extent that
detailed and meaningful management information
is provided on a monthly basis to top-level budget
holders. Supporting policies and the revenue
management internal control system have been
developed, including focused training initiatives.
41 Annual Report FY 2007 - 2008
| Chapter 2 - Programme 1: Administration |