SA govt leads Africa in high level of compliance of financial reporting

The South African government's vision of improving the quality of financial management across the public sector and uniform reporting of financial statements is fast becoming a reality, thanks to a successful initiative by the SA National Treasury.

"It is essential that SA satisfies both national and international reporting requirements," comments Ismail Mamoojee, accountant-general of the National Treasury. "On the international front, if we have better financial management, through complying with internationally-recognised accounting principles, we receive a better country assessment. Therefore it is crucial that we supply financial markets with the most up-to-date information."

Mamoojee points out that due to the Vulindlela project ("open the way" in Zulu), accurate financial information is provided a mere 30 days after month-end. "We embarked on the project realising it was time to get 'real', that is to manage government's financial assets and liabilities and to contribute to improved financial management through promoting and enforcing the transparent and effective management of revenue, expenditure, assets and liabilities in all spheres of government."

Speaking at the international conference of IT partner, business intelligence specialist SAS Institute, Mamoojee said an indicator of the project's success to date, is that both the World Bank and the International Monetary Fund (IMF) are wanting to use SA as a role model for other African countries.

"Both the IMF and World Bank have never seen such a high level of compliance with international reporting standards in Africa before and they are looking to implement similar projects in other African countries," says Mamoojee.

Trek to the summit

00Days

:

00Hrs

:

00Min

:

00Sec

Commenting on the background to the project, Mamoojee says the scenario facing the government regarding finance, personnel and stock control, was a data-rich yet information-poor one. "Although the basic information was there, it was locked into silos and encompassed differing definitions and standards.

"Through our Vulindlela project, which runs on a SAS platform, we can now collect and manage this data to deliver useful integrated information that supports management within the government. One of the most critical areas here is In-Year Monitoring, that is monitoring government expenditure against budgets and cash flow. We can now see, for example, which departments are not using their allocated funds and can take action prior to the fiscal year-end."

All 33 ministries in the government now use the In-Year Monitoring tool for financial management. The Vulindlela management information system has gained acceptance as the official data source within Government, has resulted in better cash flow management, consolidated accounts, a reduction in loan interest and provides comprehensive and current analysis.

Mamoojee says a key challenge going forward is a reduction in state debt cost by ensuring proved cash flow management, which he is positive they can achieve.