What is mfma

That there is a crisis in public financial management of monumental proportions in South Africa cannot be denied.

The reasons for this state of affairs are many and varied. Foremost amongst them, it has been argued, are poor political leadership and the attendant lack of political will to impose financial and managerial discipline; elite capture of state institutions; indifference to accountability mechanisms; lack of consequences for transgressions; and lack of technocratic capacity to implement what is certainly a complex and demanding financial management framework.

What role for universities? What role can South African universities play in mitigating this crisis? Of course, universities cannot address all of the challenges mentioned above, but they can most certainly implement programmes for the development of the technocratic skills necessary to provide the capacity that is so obviously lacking in public sector financial management.

The need for universities to become actively involved in such projects is self-evident. While many universities offer undergraduate commerce degrees which embrace accounting, finance and related subjects , these are designed purely to address the needs of the private sector. Scarcely any provision is made in these university programmes for teaching anything about the public sector.

Should universities be doing more? Recognising that huge skills gaps exist in public sector financial management notwithstanding the ambitious objectives of this legislation , the National Treasury developed a comprehensive Capacity Development Strategy CDS for Public Financial Management. The strategy provides a national perspective to address financial management capacity constraints in the public sector, which — very importantly for purposes of this discussion — include a lack of suitable education, training and development programmes.

New curriculum As part of the CDS, the National Treasury initiated a project aimed at aligning university undergraduate programmes with its Competency Framework for Financial Management.

In contrast to the undergraduate commerce degrees currently offered by universities, the specialist new curriculum proposed by the National Treasury is designed to immerse the student in the public sector environment, to teach content that directly addresses the requirements of the public sector, and to produce high-quality graduates who view public service, and particularly public financial management, as a desirable career choice.

Indifference Several reasons have been offered for this possible indifference. Among these reasons is a profound lack of understanding of the public sector environment within the accounting and finance components of the academic world, coupled with a misguided belief that programmes designed with the private sector in mind will be adequate to address the needs of the public sector. Related to this reason or so it is argued is the tendency of universities to pay undue obeisance to professional organisations whose primary role is to promote private sector needs, to the virtual exclusion of other needs.

It has also been suggested that in some universities there exists a culture of elitism, with little inclination to promote a culture of public service and therefore to support public-service oriented programmes. And perhaps, for some universities, implementing and sustaining programmes of this nature simply demand too much effort and commitment.

Whatever the reason, it is to be hoped that universities will come to recognise the crucial role that they can play in building a capable South African state, which inevitably requires the development of appropriate financial management skills. Government, in the form of the National Treasury, has taken the initiative; it is now up to our universities to do their bit. Much depends on their doing so. Andrew Siddle divides his time between the consulting and academic worlds.

The National Treasury has played a pivotal role in the introduction of financial management reforms across government since and in local government since The cornerstone of the reform initiative has been implemented through the Municipal Finance Management Act No. These pieces of legislation have been aligned with other local government legislation, such as the Structures Act, Systems Act, Property Rates Act and their regulations, to form a coherent package.

National Treasury's primary objective is to secure sound and sustainable management of the financial affairs of government, national, provincial and local, and to lead such policies and reforms. This entails supporting the development of a coherent approach that assists in the improvement of delivery of services to communities.

The mechanisms used for this support ranges from regulatory interventions, manuals, guidance, circulars, workshops, seminars, training, internship programmes and hands on support to municipalities. To fulfill this responsibility in the local government sphere, the National Treasury has developed a phased implementation strategy of financial and technical support for local government based around the MFMA, including conditional grants, subsidies, technical guidelines, policy advice and the placement of international advisors with various municipalities.

This strategy takes into account the diverse capacity of municipalities for implementing the reforms and the requirement for institutional strengthening, building municipal capacity and improving municipal consultation, reporting, transparency and accountability.

The implementation strategy requires close co-operation with other departments in national and provincial spheres. What are the aims of the MFMA? The MFMA aims to modernise budget, accounting and financial management practices by placing local government finances on a sustainable footing in order to maximise the capacity of municipalities to deliver services to communities.

It also aims to put in place a sound financial governance framework by clarifying and separating the roles and responsibilities of the council, mayor and officials. The MFMA is required by the Constitution, which obliges all three spheres of government to be transparent about their financial affairs. It also forms an integral part of the broader reform package for local government, as outlined in the White Paper on Local Government.

Contact All enquiries and requests for information should be directed to the MFMA helpline email below. This service is provided to municipalities, municipal entities and governments only.