Summary assessment
 
This public expenditure and financial accountability (PEFA) assessment was initiated and sponsored by the National Treasury. This is the first time South Africa’s provinces have been assessed on the PEFA methodology: they are baseline assessments. The national government was assessed 2008 and a repeat assessment was finalised on 26 October 2014.
 
The current PEFA for Mpumalanga has been undertaken with the formal agreement and active support of the provincial government of Mpumalanga (MPG). The assessment adopts the methodology of the public financial management performance measurement framework issued by the PEFA multi-donor programme in June 2005, revised in 2011, and subsequently adapted to sub-national governments (2013). The approach is based on evidenced, demonstrated public financial management (PFM) systems, procedures and practices in Mpumalanga at the time of the assessment, as determined through direct interviews with provincial government officials and review of official documents and reports.
 
The purpose of the current PFM performance report is to present the status of public financial management of the MPG. The TOR identifies the main objective as: • Establishing a baseline for future monitoring of progress in financial management performance and for informing the financial management capacity and maturity model (FMCMM) and donors; and • Feeding into future work on improving financial management in the province.
 
The overall assessment takes a view of the province as a whole through the Provincial Treasury (PT). The PT is responsible for preparing the provincial budgets and enforcing uniform treasury norms as prescribed by the National Treasury, deriving its powers through the Public Finance Management Act (PFMA) (section 18) and thus more relevant for the overall provincial view. The assessment involved review of documents, mainly from the National and Provincial Treasuries. Further to that, a series of interviews were held with the relevant departments in conjunction with the Provincial Treasury.
 
Though the scope of the assessment covers all the institutions under the MPG, the main focus of the assessment is on eight departments: • Provincial Treasury (Department of Finance); • Department of Health; • Department of Education; • Department of Public Works, Roads and Transport; • Department of Economic Development; • Department of Social Development; • Department of Community Safety and Liaison; and • Department of Agriculture and Rural Development.
 
This final report is presented to the National Treasury, Provincial Treasury and other stakeholders on 24 April 2015. The assessment team has addressed all comments received, including comments from the PEFA secretariat. These latter comments and the team’s responses are in annexure 4.
 
The assessment is not designed to comment on any aspects of fiscal or revenue or expenditure policy. It has not taken into account considerations of capacity, except to the degree implicit in the capacity to successfully carry out the assessed PFM procedures. It is important to underscore that the objective of the assessment has not been to evaluate and score the performance of institutions or any PFM offices or officials, but rather to assess the capacity of the PFM systems themselves to support sound fiscal policy and financial management.1