Main conclusions
 
South Africa has nine provinces. The province is the second largest province in terms of fiscal resources under its control and budget. This fiscal year aggregate expenditure is expected to reach R87 billion by 31 March 2015. By the second quarter, spending had reached 47 per cent at R41 billion. This compares with R37.5 billion for the same period last fiscal year. According to the National Treasury, Gauteng has the second largest budget at 19 per cent of the total. It currently stands at R86.4 billion. 
 
Gauteng is the second highest province in South Africa in terms of budget spending on education, health, social development, employment and economic growth. Because of this status a PEFA assessment, being a prime methodology, will not only create a PFM performance baseline that we can use to develop, package and implement meaningful government reforms but also assist the National Treasury in formulating fiscal, sectoral and poverty reduction policies and deepening fiscal decentralisation on the basis of outcomes which are confirmed through this provincial PEFA assessment. 
 
The fiscal challenges are linked to institutional weaknesses, as well as previous policy gaps, shortcomings, provincial and national economic conditions. This assessment covers many of the institutional weaknesses that have contributed to the problems, but does not address fiscal policies and international market conditions.
 
In line with the PEFA methodology, the Gauteng PEFA assessment focuses on the fiscal performance for the period 2012 to 2014, and the institutions and procedures that were in place during this period. Many reforms that were initiated before and up to the beginning of 2014 will have impacts on some of the indicators covered by this PFM-PR. Some of the impacts which go beyond March 2014 cannot be fully covered in this assessment but should be reflected in future assessments. It is important to note that a revised PEFA methodology encompassing revised indicators may be in use three years from now.