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28 November 2005

The Superintendent-General of the Department of Finance, Mr Phineas Tjie
The Accountant-General, Mr Geo Paul
Heads of Departments and Municipalities
Chief Financial Officers
Representatives from South African Local Government Association (SALGA)
Representatives from the Business Fraternity
Ladies and gentlemen
Distinguished guests

Ladies and gentlemen, we are appropriately gathered here today as service providers and service users. We believe that in a democracy, decisions on policy are taken by the Government which in turn is accountable to the electorate who are the stakeholders.

As a Department entrusted with the legislative mandate of controlling provincial resources as well as the custodians of public funds, we have the responsibility to manage such resources in accordance with the prescribed legislation.

We therefore believe that we need to take into account the views of our stakeholders, who are affected by our service delivery standards and other policies.

It also requires that those we serve become aware of institutional arrangements and mechanisms put in place to prevent misuse of public funds and resources, as well as the embezzlement of the scanty resources meant for the improvement of the quality of life of those deserving them.

Mr Programme Director, allow me to say that effective and efficient service delivery, consultation and constant interaction with stakeholders will however be fruitless in the absence of sound financial management and accountability, particularly in government departments and municipalities.

For managers and financial officers, these are rapidly changing times. Current reforms taking place in public services worldwide have made numerous opportunities available to us. We now have the ability to access and disseminate information from databases around the world and our country at large.

We organise tendering, ordering and payments through electronic commerce. We also have the ability to take better control over operations of our various departments' businesses, with the assistance of sophisticated financial management and support systems, to produce better programme outcomes, including quality service delivery.

However, this technological advancement has not been able to eradicate fraud and corruption totally, which is a great impediment to service delivery. The challenge, is still how to have the right information in the right place and at the right time, to assist in detecting fraud and corruption.

Colleagues, it is very important therefore that financial transactions by departments and municipalities be handled most effectively and in an inter-related corporate governance framework, which addresses both our relations with our stakeholders and the accountability requirements of the Public Service.

Fundamentally, good and clean governance arrangements are essential for departments and municipalities to be able to demonstrate to stakeholders that they can be trusted to do what they are established to do.

Such arrangements assist stakeholders to have confidence that departments and municipalities not only have the competence and expertise required, but that they have also established robust administrative arrangements that enable them to do so efficiently, effectively and ethically.

Elements of good governance should comprise the following:
* demonstrate that required managerial disciplines are in place
* assist with planning and decision making for management
* identify best private public sector practices
* establish credibility with external stakeholders
* provide a defence against internal and external criticisms.

It is therefore essential for departments and municipalities to ensure that their staff has the capability to contribute in all areas of financial management at their workplace.

Such efforts require that staff members are acquainted with all sections of the Public Finance and Municipal Management Acts, as well as other policy documents regarding the management of public finances. This can be done through effective risk management which is an integral element of clean corporate governance, so that departments and municipalities are not exposed to financial and economic losses as a consequence of pursuing a particular course of action.

Colleagues, we can manage financial risks in our various departments and ensure clean corporate governance if only all officers in the Public Service and municipalities can act in accordance with relevant statutory requirements and government policies, and are also obliged to act in ways which are consistent with regulations contained in the Public Finance and Municipality Management Acts.

These Acts require all public servants and workers in our municipalities, and all other stakeholders to be aware of legislative and policy frameworks affecting the programmes they are administering.

Departments and municipalities should ensure that their staff receives appropriate information and training for their level of responsibilities. it also means that public servants should not knowingly take decisions which are in breach of legislation or government policies.

Further, systems designed to provide a high level of assurance with respect to legislative compliance, and compliance with decisions of government regarding the use of public funds must be in place.

Ladies and gentlemen, I have elaborated in some detail how we can all institute sound financial management systems, which will assist us in the detection and prevention of fraud and corruption in the Public Service, as well as in all our municipalities, to ensure the delivery of high quality, accountable and cost effective public services to our stakeholders: the people of the North West province.

May I conclude by saying, “Whether you are working in the Public Service, Municipality or private sector, good and clean corporate governance is paramount to the sustainability, credibility, and success of your department. Travelling the road of clean corporate governance will not guarantee you success, but not travelling on it, will almost certainly guarantees you failure.

I thank you.

Issued by: Department of Finance, North West Provincial Government
28 November 2005
Source: North West Provincial Government (http://www.nwpg.gov.za)