2 research outputs found
A model for budget management in the Free State provincial government
Thesis (D. Tech.) - Central University of Technology, Free State, 2005The primary objective of this research has been to undertake a critical investigation of the application of the budget process and the achievement of budget objectives in the Free State Provincial Government. The emphasis has been specifically on the planning and control functions of management. The justification for the research is the continuous demand for unlimited public services and the limited availability of the state‟s financial resources. The undertaking proceeded from the hypothetical viewpoint that a budget is designed to assure that public resources are spent according to the preferences of the taxpayer and the legislature. A budget promotes consistency in the process of resource allocation, and its implementation should be enforced by constant evaluation and monitoring.
The research includes the following aspects:
- The problems encountered by the Free State Provincial Government in its endeavors to optimize the effectiveness and efficiency of the implementation of the budget.
- The fundamental principles of budget management in general, and in particular various types of budget and budget management techniques.
- The evaluation of budgets as a basis for reporting on performance and the importance of such performance reports.
The research methodology followed relies both on a survey of relevant literature and on empirical data. The former consists of a discussion regarding the extent to which the present budget system promotes effective and efficient budget control management and the achievement of budget objectives. As part of the empirical research an “ex post facto” analysis was undertaken of external audit reports and appropriation accounts over a period of fourteen years. In addition the fishbone or root-cause analysis approach was followed to identify core symptoms. The theoretical and empirical research yielded the following results:
- The partial disturbance of the input/output relationship means that performance cannot be measured against profit as in the private sector. To compensate for this deficiency management should focus on financial statements and on audit and performance reports to measure performance.
- Management needs to have an unimpeded access to budget information on the financial management system right from the beginning of each new financial year.
- Estimates of expenditure (projections) should be captured on a monthly basis in the financial management system. With the implementation of the Medium Term Expenditure Framework, budget projections must be regarded as compulsory.
- Press reports and reports of the Auditor-General indicated that shortcomings relating to audit committees still exist both on national and provincial levels. This deficiency has a negative effect on the effectiveness of the internal audit function.
- An annual percentage deviation in various departments between voted amounts and expenditure was substantial. In some instances the deviation
- Losses should be monitored constantly, and management should be aware of the impact of losses and claims on financial resources. Their prevention should be part of each department‟s financial strategy.
- Budget manipulation reduces the budget‟s effectiveness and efficiency as a means of performance measurement.
The first possible solution to solve the problems associated with the budget is privatization of the service or function. The second possibility is the implementation of a quality control program. Its objective would be to reverse poor performance. To be successful, the quality control program should rely on clear accountabilities, effective partnerships and devoted leadership. A third recommendation might be the implementation of a quality assurance and quality control division for each department. The first component would gather all the necessary documentation to assure quality while the second would monitor effective application. The first requirement in measuring performance will be the motivation of all staff to be committed to the improvement of service delivery. The second challenge will be to train them accordingly. The third challenge will be the development of a performance report procedure for each department. A further recommendation is the analysis and reduction of underspending. Finally, accounting officers must implement effective and transparent processes of financial and risk management.
Broadly viewed, the integration of budget and strategic planning initiatives of the National Treasury are a slow process that cannot be implemented overnight. National departments and provinces are, however, requested by National Treasury to improve on the outputs and the development of robust output performance measures and service delivery indicators. This viewpoint supports the proposed budget-management model aimed at effective objective achievement or sustainable development of the Free State. In future the budget management process could be based on this model to improve service delivery
A model for budget management in the Free State provincial government
ThesisThe primary objective of this research has been to undertake a critical
investigation of the application of the budget process and the achievement of
budget objectives in the Free State Provincial Government. The emphasis has
been specifically on the planning and control functions of management. The
justification for the research is the continuous demand for unlimited public
services and the limited availability of the state's financial resources. The
undertaking proceeded from the hypothetical viewpoint that a budget is designed
to assure that public resources are spent according to the preferences of the
taxpayer and the legislature. A budget promotes consistency in the process of
resource allocation, and its implementation should be enforced by constant
evaluation and monitoring.
The research includes the following aspects:
The problems encountered by the Free State Provincial Government in its
endeavors to optimize the effectiveness and efficiency of the
implementation of the budget.
The fundamental principles of budget management in general, and in
particular various types of budget and budget management techniques.
The evaluation of budgets as a basis for reporting on performance and the
importance of such performance reports.
The research methodology followed relies both on a survey of relevant literature
and on empirical data. The former consists of a discussion regarding the extent to which the present budget system promotes effective and efficient budget
control management and the achievement of budget objectives. As part of the
empirical research an "ex post facto· analysis was undertaken of external audit
reports and appropriation accounts over a period of fourteen years. In addition
the fish bone or root-cause analysis approach was followed to identify core
symptoms. The theoretical and empirical research yielded the following results:
- The partial disturbance of the inpuUoutput relationship means that
performance cannot be measured against profrt as in the private sector. To
compensate for this deficiency management should focus on financial
statements and on audit and performance reports to measure performance.
Management needs to have an unimpeded access to budget information on
the financial management system right from the beginning of each new
financial year.
Estimates of expenditure (projections) should be captured on a monthly basis
in the financial management system. With the implementation of the Medium
Term Expenditure Framework, budget projections must be regarded as
compulsory.
- Press reports and reports of the Auditor-General indicated that shortcomings
relating to audit committees still exist both on national and provincial levels.
This deficiency has a negative effect on the effectiveness of the internal audit
function.
- An annual percentage deviation in various departments between voted
amounts and expenditure was substantial. In some instances the deviation
exceeded the limitation of two percent by more than ten percent. Losses should be monitored constantly, and management should be aware of
the impact of losses and claims on financial resources. Their prevention
should be part of each department's financial strategy.
Budget manipulation reduces the budget's effectiveness and efficiency as a
means of performance measurement.
The first possible solution to solve the problems associated with the budget is
privatization of the service or function. The second possibility is the
implementation of a quality control program. Its objective would be to reverse
poor performance. To be successful, the quality control program should rely on
clear accountabilities, effective partnerships and devoted leadership. A third
recommendation might be the implementation of a quality assurance and quality
control division for each department. The first component would gather all the
necessary documentation to assure quality while the second would monitor
effective application. The first requirement in measuring performance will be the
motivation of all staff to be committed to the improvement of service delivery. The
second challenge will be to train them accordingly. The third challenge will be the
development of a performance report procedure for each department. A further
recommendation is the analysis and reduction of underspending. Finally,
accounting officers must implement effective and transparent processes of
financial and risk management.
Broadly viewed, the integration of budget and strategic planning initiatives of the
National Treasury are a slow process that cannot be implemented overnight.
National departments and provinces are, however, requested by National
Treasury to improve on the outputs and the development of robust output
performance measures and service delivery indicators. This viewpoint supports the proposed budget-management model aimed at effective objective
achievement or sustainable development of the Free State. In future the budget
management process could be based on this model to improve service deliver