Parliamentarians in the House of Representatives last week Thursday approved a piece of legislation that will significantly revamp the Public Finance Management Act of 2007.
The Public Finance Management Bill of 2014, the proposed legislation which will be debated for approval during next Monday’s sitting of the Senate, provides for the proper financial management and control of the money, property and other resources of the public sector including the Consolidated Fund, and other public funds under the Consolidated Fund.
According to the explanatory notes, the 2014 Bill addresses many of the weaknesses and gaps in the 2007 legislation, and aims at strengthening the overall fiscal framework for the economy as well as provide proper procedures for transparency and accountability.
Presented to the House by Leader of Government Business Gregory Bowen, the Bill, he says applied to all ministries, departments, agencies, entities, institutions of executive, legislative and judicial branches of the central and all local governments, all autonomous bodies under government control, state-owned enterprises and any entity or individual who receives or uses public money, and all officers and employees in those entities.
The legislation said that all spending by ministries and budgetary entities shall be in accordance with the spending plans approved by the minister. “Unless other specified by the minister by regulations, the spending plans shall be reviewed monthly by the ministries and budgetary institutions and any changes shall be notified to the minister by the 20th of the month preceding, for the following month for the approval of the minister.”
It also points out that no public officer shall have the power to commit the government to financial liability, including contingent liability, unless specifically authorised to do so under the Act or regulations or instructions issued pursuant to the Act.
Section 87 of the Bill notes that, “Any officer or employee of a covered entity who, without a reasonable excuse makes commitments resulting in financial obligations for the government, in contravention of the provisions of this Act shall be guilty of an offence and on conviction be liable to imprisonment not exceeding one year or to a fine not exceeding the value of the assessed impact of the commitment or both.”
With regard to statutory bodies and stated owned enterprises, the legislation says that the board of directors of these bodies shall submit no later than four months before the beginning of a fiscal year, a three-year strategic plan to the relevant line minister. The three-year strategic plan shall include a minimum, forecast financial information, forecast capital expenditure, key performance indicators and performance targets.
By Linda Straker