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Act engenders participatory budgeting
Southern African Parliamentary Support Trust
January 31, 2012

The enactment of the Public Finance Management Act (PFMA) and introduction of the Budget Strategy Paper has been warmly received by all interested in a strong and accountable public finance management system that engenders participatory budgeting.

The PFMA has provisions that empower Parliament to conduct hearings in order to solicit public input during the formulation of the Budget. There are also provisions for quarterly reporting by ministries to parliamentary committees on Budget performance.

This ensures that Parliament has teeth to monitor the deployment and use of public funds. The Budget Strategy Paper is an innovation that allows Parliament and the public to participate in the setting of national priorities for the Budget.

While these noble budget reforms are most welcome, it is their enforcement which is glaringly lacking. The PFMA requires supporting regulations in order to be properly enforced.

The Ministry of Finance is currently drafting regulations and has circulated drafts for comment. Parliament, through the Budget and Finance Committee, should therefore seize this opportunity and influence the content of these regulations in order to advance its role in the entire Budget process from formulation, implementation and audit of finances.

The draft regulations prepared by the Ministry of Finance and circulated to selected stakeholders for comment speak to the submission of the Budget Strategy Paper to Parliament “for information purposes only”.

This should certainly not be allowed to pass. This is because the Budget Strategy Paper marks the beginning of the budget process, a procedure over which Parliament has a constitutional mandate of oversight.

Consequently, Parliament should be allowed time to engage in debate and submit its recommendations and/or proposals which it feels can enhance the setting of budget and macroeconomic priorities for the country in the forthcoming financial year.

The recommendations of Parliament should be seriously considered by the Executive. The time frame for submitting the Budget Strategy Paper to Parliament should be clearly outlined in the regulations. Best practice is at least two months before presentation of the Budget to Parliament.

The reason why the Executive should present the Half-Year Economic and Fiscal Update, the Half-Year Budget Situation Analysis Report and the Annual Economic and Fiscal Update Reports to Parliament, is to facilitate the latter to carry out its executive oversight function.

However, this exercise will be futile and a mere waste of resources if Parliament is not given enough time to scrutinise and analyse these Budget implementation reports with input from civic groups and the general public.

Parliament should be afforded time to assess and monitor the effectiveness and efficiency of government’s Budget implementation process and level of transparency and accountability in the utilisation of public resources.

These reports are as good as the national budget itself. Parliament should therefore be seen to vigorously interrogate them and undertake meaningful debate on them in plenary sessions.

The public finance management framework which does not recognise the separation of powers and responsibilities of the three arms of government does not engender democratic governance.

While it is the prerogative of the executive to formulate the annual Budget, it is within the powers of the legislature to analyse, debate and pass this Budget.

Consequently, Parliament should not be hindered from performing its constitutional mandate of oversight by time constraints.

The regulations should therefore include provisions that allow the Budget and Finance Portfolio Committee, in consultation with other committees, to consider, analyse, review and discuss the Annual Budget Statement and table an analytical report in the House of Assembly within a certain reasonable period (such as 30 days) from the day the Annual Budget Statement was first presented to the House. The regulations should outlaw fast-tracking of the Budget.

The report by the Parliamentary Budget Committee may recommend with reasons, amendments to the appropriations/votes and programmes, which may be approved or rejected by the House of Assembly through a resolution passed by a majority of its membership.

The report and its resolutions shall within seven days after adoption by Parliament be submitted to the Finance minister for consideration in preparing the final appropriation and finance Bills.

One of the primary responsibilities of the government is to ensure that the benefits of national resources are equitably shared among the wider population, including the poorer and most vulnerable sections of society.

One of the mechanisms of measuring how effective the government is performing this responsibility is by issuing reports on operations of government departments and public entities.

Upholding of public transparency and accountability is one of the prerequisites of democratic governance. The introduction of various reporting requirements is a welcome development as it facilitates transparency and gives account of how the government carries out its assigned responsibilities.

The greatest shortcomings of the current quarterly and monthly reports produced by some of the government ministries are that they lack useful information on the operations and activities of the ministries.

The reports do not outline the outputs, outcomes and impact of the expenditures, thereby making it very difficult for portfolio committees to effectively monitor the use of public funds.

It is disappointing to see the draft regulations watering down the importance of monthly and quarterly submission of reports to Parliament.

It is important to highlight that the monthly and quarterly vote reports are more operational in the sense that they are more current and provide an opportunity for correction before mistakes or mismanagement of resources is perpetuated.

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