South Africa: Improving Public Financial Management

Local government in South Africa is the primary vehicle for the delivery of basic services and socio-economic rights in terms of the Constitution and relevant legislation and policy since 1994. So far, notable progress has been made in delivering basics services such as housing, water, and sanitation to the population. Nevertheless, various studies show that financial management at all three levels of government—local, regional and national—is weak. This is especially true at local government level, leading to institutional inefficiencies that result in high levels of unauthorised and wasteful expenditure, therefore impacting negatively on the ability of municipalities to deliver on their constitutional and legislative mandates.

While South Africa’s National Treasury has taken steps to address this issue, Provincial Treasuries have limited capacity to adequately assist municipalities to better manage public funds. At the same time, there is insufficient community participation in setting or monitoring budgets and performances at local government level. In the circumstances, it is clear that much more needs to be done to improve public financial management in all three spheres of government to create safe, healthy and economically sustainable areas in order to achieve the Government's transformation agenda.

The goal of the program is to provide technical assistance that will contribute to the development of improved financial management through enhanced institutional, organisational, human capacity, and stakeholders' relationships.

DT Global will assist the Contracting Authority in achieving the overall objectives of the programme in an efficient and streamlined manner. Indicative activities will include:

• Lead the Monitoring and Evaluation of the programme as per the Result-Based Framework.
• Establish a knowledge management system applicable to the program.
• Facilitate a better understanding across government of the Public Financial Managment reform and responsiveness to implementation issues in municipalities and provinces.

Three Key Result Areas have been prioritized in the broad National Treasury Capacity Development Strategy.

• Result Area 1: Increased Professionalization of Public Financial Management within all spheres of government (national, provincial and local).
• Result Area 2: Enhanced Capacity of Provincial Treasuries to perform their roles with respect to provincial departments and municipalities.
• Result Area 3: Improved Capacity of Municipalities to manage public funds and deliver services.