Public Finance Management Act, 1999 (Act No. 1 of 1999)RegulationsTreasury Regulations for Departments, Constitutional Institutions and Public EntitiesPart 9 : Public entities32. Borrowings and leases |
| 32.1 | Borrowing [Section 66 of the PFMA] |
| 32.1.1 | For purposes of section 66(5) of the Act, public entities listed in Schedule 3A or 3D of the Act may borrow money for bridging purposes with the approval of the Minister of Finance, subject to the following conditions: |
| (a) | the debt must be repaid within 30 days of the end of the financial year; |
| (b) | borrowing may not exceed a limit determined in advance by the Minister of Finance, in consultation with the national executive authority or provincial MEC for finance, whichever appropriate; |
| (c) | foreign borrowing may not be undertaken; |
| (d) | a request for borrowing for bridging purposes must be submitted to the Minister of Finance at least 30 days before the borrowing. The following must be submitted together with the request— |
| (i) | detailed cash flow and income and expenditure statements indicating how the debt will be repaid during the prescribed period; and |
| (ii) | the terms and conditions on which the money is borrowed. |
| 32.1.2 | This regulation does not preclude the use of credit cards, fleet management cards or other credit facility repayable within 30 days of the date of statement. |
| 32.2 | Leases |
| 32.2.1 | For the purpose of this regulation, a lease is an agreement whereby the lessor conveys to the lessee in return for a payment or a series of payments the right to use an asset for an agreed period of time. |
| 32.2.2 | A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. |
| 32.2.3 | An operating lease is a lease other than a finance lease. |
| 32.2.4 | The accounting authority of a public entity may, for the purposes of conducting the public entity’s business, enter into lease transactions without any limitations provided that such transactions are limited to operating lease transactions. |
| 33.2.5 | With the exception of agreements concluded in terms of Treasury Regulation 16, public entities may only through the following functionaries, enter into finance lease transactions. |
| (a) | A public entity listed in Schedule 2: The accounting authority for that Schedule 2 public entity; |
| (b) | A national public entity listed in Schedule 3A: The Minister of Finance; |
| (c) | A national government business enterprise listed in Schedule 3B and authorised by the Minister by notice in the national Government Gazette: The accounting authority of that Schedule 3B government business enterprise, subject to conditions that the Minister may impose; and |
| (d) | A provincial government business enterprise listed in Schedule 3D and authorised by the Minister of Finance by notice in the national Government Gazette: The MEC responsible for Finance in the Province, acting with the concurrence of the Minister, subject to any conditions that the Minister may impose. |