The effectiveness and efficiency of a country’s public sector is vital to its success. Furthermore, sound financial management is a critical element in ensuring good delivery of public services.

This was the point of departure that was explored during a panel discussion presented by CFO Talks, presented by the Southern African Institute for Business Accountants (SAIBA) last week.

How the role of the public sector CFO could be elevated, protected and enhanced to improve service delivery was a topic examined by the invited speakers, including Dumisani Dlamini, CFO at the National Arts Council; Michael Sass, independent consultant and former Accountant General SA; Trishantanie Pillay, former CFO at SAFCOL; and Ntina Themba, Gauteng Provincial Accountant General.

The keynote speaker was Tsakani Ratsela, Deputy Auditor General of South Africa (AGSA), who tackled the topic of how the integrity and independence of public sector CFOs could be protected.

Ratsela said public sector CFOs are in a privileged position because both the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA) emphasise the CFO’s important role of ensuring the proper financial management in the public sector.

“In essence, these and a plethora of other legislative frameworks protect and endorse the CFO’s role of ‘effective financial management of the institution including the exercise of sound budgeting and budgetary control practices; the operation of internal controls and the timely production of financial reports’”.

She said AGSA has been playing its part to help protect and enhance the role of the public sector CFO.

“For the past 10 years, our office has steadfastly made audit recommendations aimed at enhancing, among others, the role of the CFOs and those who support them, especially in the finance units.”

Ratsela said these recommendations are largely actions aimed at dealing with the root causes that have constantly hampered the performance of the public sector, including the finance departments or units that they head.

These recommendations include having controls in place to ensure that transactions are processed in an accurate, complete and timely manner to reduce errors and omissions in financial reports.

It is also recommended that daily disciplines such as review and approval processes, and monthly reconciliation of key accounts should be normal practice to enable officials to prepare credible monthly management accounts and meaningful analyses and forecasts.

Auditors should be allowed to test the robustness of their processes before financial statements are submitted for audit at year-end to identify and rectify errors and omissions.

“For the past 10 years, our office has steadfastly made audit recommendations aimed at enhancing, among others, the role of the CFOs and those who support them.”

Action plans must be prepared, implemented and monitored, including definite actions to be implemented to address matters, timelines and responsibilities assigned.

Proper record keeping and availability of evidence that supports amounts and disclosures in the financial statements should be maintained throughout the year.
It is also recommended that financial systems be set up to enable implementation of monthly controls; information in account records and registers should be continuously validated, especially where there is high risk of inaccuracies; effective human resource management should be implemented to equip finance functions with adequate and sufficiently skilled personnel; employees in finance units are to be provided with training to keep up to date with changes in financial reporting requirements; vacancies and instability in CFO positions should be addressed; and close supervision and review by qualified and competent senior managers should be implemented.

“In the end, good governance systems and performance also positively impact and enhance our reputation as CFOs.”

Ratsela said AGSA believes that if these basic actions are implemented, governance in the public sector could be transformed drastically and thus further elevate the critical role played by CFOs and their teams.

Action plans must be prepared, implemented and monitored, including definite actions to be implemented to address matters, timelines and responsibilities assigned.

Proper record keeping and availability of evidence that supports amounts and disclosures in the financial statements should be maintained throughout the year.

It is also recommended that financial systems be set up to enable implementation of monthly controls; information in account records and registers should be continuously validated, especially where there is high risk of inaccuracies; effective human resource management should be implemented to equip finance functions with adequate and sufficiently skilled personnel; employees in finance units are to be provided with training to keep up to date with changes in financial reporting requirements; vacancies and instability in CFO positions should be addressed; and close supervision and review by qualified and competent senior managers should be implemented.