Public Finance Management Act, 1999 (Act No. 1 of 1999)Understanding and Using this ActGuide for Accounting OfficersAnnexure E: Glossary |
Accounting officer
The head of a department or the chief executive officer of a constitutional institution
Accrual accounting
A system of accounting in which items are brought to account as they are earned or incurred and not as money is received or paid
Benchmarking
A process of systematically measuring and comparing the products, services and processes of an organisation, internally and against other relevant organisations, and adopting the best practices
Budget
A systematic indication of the resources needed by and allocated to each organisational unit for carrying out its part of the strategic plan
Budgeting
The process of expressing, in numerical terms, a set of planned activities for a coming period
Cash flow statement
A financial statement that shows, for a financial period, the sources of cash inflows and how the cash was used, distinguishing between operating, investing or financing activities
Change management
The process of aligning an organisation’s people and culture with changes in organisational strategy, structure, systems and processes
Department
A national or provincial government department, or a constitutional institution
Effectiveness
The extent to which policy objectives, operational goals and other intended effects are achieved
Executive authority
| • | In relation to a national department, the Cabinet member who is accountable to Parliament for that department |
| • | In relation to a provincial department, the MEC who is accountable to the provincial legislature for that department |
Financial management
In the public sector, financial management focuses on transparency, prioritisation of scarce resources and value for money, i.e. providing the best possible services with the available resources.
Financial statements
Such statements consist of at least:
| • | A balance sheet |
| • | An income statement |
| • | A cash flow statement |
| • | Any other statements that may be prescribed |
| • | Any notes to these statements |
Financial year
The period 1 April to 31 March
Fruitless and wasteful expenditure
Expenditure that was made in vain and that could have been avoided had reasonable care been exercised
Generally recognised accounting practice
Accounting practice complying in material aspects with standards issued by the Accounting Standards Board
Irregular expenditure
Expenditure, other than unauthorised expenditure, incurred in contravention of or not in accordance with a requirement of any applicable legislation, including:
| • | The PFMA |
| • | The State Tender Board Act of 1968 or any regulations in terms of that Act |
| • | Provincial legislation on procurement procedures |
Key performance indicator
Key measures of performance for an organisation or business unit within an organisation; indicators of the critical success factors for the organisation
Main division within a vote
One of the main segments into which a vote is divided and which:
| • | Specifies the total amount that is appropriated for the items under hat segment |
| • | Is approved by Parliament or a provincial legislature as part of the vote |
MEC for finance
The Member of the Executive Council of a province who is responsible or finance in the province
Minister
The Minister of Finance
National Treasury
Consists of:
| • | The Minister of Finance, who is the head of the national Treasury |
| • | The national department formed by the merger of the Departments f Finance and State Expenditure |
Operational plan
The first year of the multi-year strategic plan, setting out specific actions to enable the organisation to achieve its overall strategic plan targets
Outcomes
The impact of government activity on society
Outputs
The products and services directly produced by an agency and delivered to external users
Provincial treasury
Consists of:
| • | The MEC for finance in the province, who is the head of the provincial treasury |
| • | The provincial department responsible for financial matters in the province |
Risk management
The systematic application of management policies, procedures and practices to the tasks of identifying, analysing, assessing, treating and monitoring risk. This includes quantifying and assessing actual and potential risks and their associated losses, and developing management strategies to either assume control or eliminate these risks and losses.
Service delivery indicator
A quantification related to a specific function, included in a department’s service delivery improvement programme and used to monitor performance
Stakeholder
Any person or group who has an interest in or is affected, even unwittingly, by a particular issue
Targets
Quantified performance levels or changes in the level of performance o be attained at a specific future date
Treasury
The national Treasury or a provincial treasury, as may be appropriate n the circumstances
Unauthorised expenditure
Either of the following:
| • | Overspending of a vote or of a main division within a vote |
| • | Expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with the purpose of the main division |
Vote
One of the main segments into which an appropriation Act is divided and which:
| • | Specifies the total amount that is to be appropriated, usually per department, in an appropriation Act |
| • | Is separately approved by Parliament or a provincial legislature before it approves the relevant draft appropriation Act |