Evaluation of financial management practices in the Department of Correctional Services

Mathiba, Luckyboy Samuel (2011-03)

Thesis (MPA))--School of Public Leadership, 2011.

Thesis

ENGLISH ABSTRACT: The objective of this study is the evaluation of financial management practices in the Department of Correctional Services (DCS). For the purpose of the study, "financial management practices‟ are defined and demarcated as the practices performed by the accounting officer, chief financial officer and other managers in the areas of budgeting, supply chain management, movable asset management and control. Recurrence of similar internal audit and inspection findings, as well as the continuous poor audit reports that the department had been receiving annually, led the office of the National Commissioner to request all branches and Regional Commissioners to compile action plans aimed at addressing non-compliance. In order to fulfil the study objective, the normative requirements for the identified financial management practices are first defined in terms of financial management theory, policy and legislation. The accounting officers are heads of departments, and they account personally for financial transactions. The concepts of "budget processes" and "planning" are explored in order to identify normative requirements. „Budget‟ is identified as part of organisational planning, which starts with the aim and the mission of the institution. Under supply chain management, the principles of procurement are discussed, as considerable amounts are spent on goods and services. The life cycle of assets is discussed in detail, including the procedure for giving account of assets. Control is defined as a process through which a manager ensures that activities are carried out as originally planned. With regard to policy and legislation, the Public Finance Management Act (PFMA), Act 1 of 1999 as amended by Act 29 of 1999 (South Africa, 1999) and Treasury Regulations are explained in detail, focusing on the budget process and financial management responsibilities of all different role players. With regard to supply chain management, policies are explained in detail, focusing on the acquisition of goods and services. The acceptable supply chain management system is also highlighted. According to Gildenhuys (1997:137), equipment is called movable assets and this category of assets are obtained and created to be utilised for a number of years as instruments for delivering services. With regard to control, in order to comply with financial management policies, an official in a department must ensure that the system of financial management and internal control established for that department is carried out within the area of responsibility of that official. The budget and planning processes of the Department of Correctional Services are explained in detail. How the financial management cascades through the department is highlighted by means of an organogram. Supply chain management processes are discussed in detail, focusing on the procurement procedures and requirements for acquisition of goods and services. The policy on asset management for the Department of Correctional Services is considered, focusing on the acquisition and control of assets. The legislative framework of the department is also examined in detail, focusing on the control measures within the department. The theory of evaluation is discussed in detail, with the emphasis on evaluation questions. A summary is provided of the financial functions of budgeting, supply chain management, asset management and control in terms of the financial functions of each of the following role players: the Accounting Officer, Chief financial officer and other managers. Evaluation questions are formulated, and audit reports contained in the annual reports, the internal auditor‟s reports and circulars of the department are used to answer those questions. Finally, recommendations are made, emphasising that Department of Correctional Services needs to continue to invest in the training and development of all staff, regarding The PFMA (South Africa, 1999) and Treasury Regulations.

AFRIKAANSE OPSOMMING: Die doel van hierdie studie was om finansiële bestuurspraktyke binne die Departement Korrektiewe Dienste (DKD) te evalueer. "Finansiële bestuurspraktyke" word vir die doel van die studie gedefinieer en omskryf as die praktyke wat deur die rekenpligtige amptenaar, die hoof finansiële bestuursbeampte en ander bestuurders binne die gebied van begroting, voorsieningskettingbestuur, roerende batebestuur en beheer beoefen word. Herhaalde voorkoms van soortgelyke interne ouditerings- en inspeksiebevindings, sowel as die voortdurende swak ouditverslae wat jaarliks deur die departement ontvang is, het die kantoor van die Nasionale Kommissaris genoop om alle takke en Streekskommissarisse te versoek om 'n plan van optrede op te stel om nie-nakoming aan te spreek. Om die doelwit van die studie te bereik, word die normatiewe vereistes vir die geïdentifiseerde finansiële bestuurspraktyke eerstens in terme van finansiële bestuursteorie, beleid en wetgewing gedefinieer. Die rekenpligtige amptenare is hoofde van departemente en hulle doen persoonlik verantwoording vir finansiële transaksies. Die konsepte „begrotingsproses‟ en „beplanning‟ word verken om normatiewe vereistes te identifiseer. „Begroting‟ word as deel van organisatoriese beplanning, wat by die doel en misie van die instelling begin, geïdentifiseer. Die beginsels van aanskaffing word in verband met die voorsieningskettingbestuur bespreek aangesien aansienlike bedrae op goedere en dienste bestee word. Die lewensiklus van bates word met inbegrip van die prosedure vir verslaglewering aangaande bates in besonderhede bespreek. Beheer word as 'n proses waarvolgens 'n bestuurder verseker dat aktiwiteite sonder afwyking van 'n oorspronklike plan uitgevoer word. Ten opsigte van beleid en wetgewing word die Wet op Openbare Finansiële Bestuur (WOFB), No. 1, 1999 soos gewysig deur Wet 29 van 1999 (South Africa, 1999) en Regulasies van die Departement Finansies in besonderhede verduidelik, met aandag aan die begrotingsproses en die finansiële bestuursverantwoordelikhede van al die verskillende rolspelers. Beleid betreffende voorsieningskettingbestuur word in besonderhede bespreek met spesifiek aandag aan die verkryging van goedere en dienste. Die aanvaarbare voorsieningskettingbestuurstelsel word ook toegelig. Volgens Gildenhuys (1997:137) word toerusting as roerende bates aangedui en hierdie kategorie van bates word verkry en geskep om vir 'n aantal jare as middele vir die lewering van dienste gebruik te word. Om aan finansiële bestuursbeleid met betrekking tot beheer te voldoen, moet 'n amptenaar binne 'n departement verseker dat die stelsel wat binne sy/haar verantwoordelikheidsveld vir die finansiële bestuur en interne beheer van daardie departement ingestel is, toegepas word. Die begrotings- en beplanningprosesse van die Departement Korrektiewe Dienste word in besonderhede verduidelik. 'n Organogram word gebruik om lig te werp op hoe die finansiële bestuur die hele departement deurvloei. Voorsieningskettingbestuursprosesse word in besonderhede bespreek met klem op die prosedure en die vereistes vir die verkryging van goedere en dienste. Aandag word geskenk aan die beleid oor batebestuur binne die Departement Korrektiewe Dienste, met klem op die verkryging en beheer van bates. Verder word die departement se wetgewingsraamwerk in besonderhede ondersoek, weereens met aandag aan beheermeganismes binne die departement. Die teorie aangaande evaluering word in besonderhede bepreek, met spesiale klem op vrae wat vir evaluering gestel word. 'n Opsomming van die finansiële funksie van begrotings, voorsieningskettingbestuur, batebestuur en beheer in terme van die finansiële funksies van elk van die rolspelers, naamlik die rekenpligtige amptenaar, die hoof bestuursbeampte en ander bestuurders word voorsien. Vrae vir evaluering word geformuleer en antwoorde op daardie vrae word aan die hand van ouditverslae wat in jaarverslae opgeneem is, die interne ouditeur se verslae en departementele omsendbriewe verskaf. Ten slotte word aanbevelings gedoen wat beklemtoon dat die Departement Korrektiewe dienste sy belegging in die opleiding en ontwikkeling van alle personeel ten opsigte van die WOFB (South Africa, 1999) en Regulasies van die Departement Finansies moet voortsit.

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