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ENVIRONMENT OF PUBLIC FINANCIAL MANAGEMENT

  1. GOVERNMENT AND ADMINISTRATION AS HUMAN ACTIVITIES

Institutions needs for government and administration of any state require an existence of their own. any institution of government in existence is dependent for its existence and persistence on decisions taken by human beings. Every country has its own type of political, cultural, historical, democratic, economic, educational, geographical and physical environments, which influence their own type of government and executive institutions. The process of public financial management takes place in an environment created by the prevailing political, social and economic ideology; hence government institutions are institutionalised ideologies.

  1. POLITICS

All people over the age of 18 years and are citizens of Zimbabwe are entitled to vote in general elections or local government elections on a party political basis. Elections take place on a party political basis and elected representatives are expected to bear in mind the political mandate they have received from the electorate.

  1. GOVERNMENT

Government follow politics. The function of government is to put into practice the political mandate given to the elected representatives during a general election. The political objectives pursued by a government of the day are those of the political party that makes the majority in the House of Assembly. Government can be defined as the practical realisation, configuration or institutionalisation of the political objectives of the political party in power. According tot eh Constitution of Zimbabwe Act, legislative power is vested in Parliament, which consists of the Executive President, the House of Assembly and the House of Senate. The constitution section------further lays down that Parliament shall be the sovereign legislative authority in an over the Republic, and shall have full power to make laws for the peace, order and good government of the country/Republic. The making of law is the parliamentary enforcement and authorisation of the decisions to effect good government. Cabinet governs the country because it is in practice of the government of the day. Cabinet members formulate bills that are submitted to Parliament for legal approval. Government priority is economic growth and progress of the country, and the process of public by the political and government functions.

  1. LAWS

Acts of parliament are the authorisation and institutions for given activities. Laws are the instruments used by the executive as directives for the execution of public functions. There are laws that have limited validity duration i.e. various Appropriation Acts passed during a financial year. There are also permanent Laws i.e. Audit and Exchequer Act. The main purpose of the laws pertaining in one way or the other to public finance is to legalise the government economic policy, and they compromise an instruction tot eh executive. This aspect may be found in budget discussions. The budget is a political policy of government expressed in monetary terms for a given year. It is a programme by which public servants perform their activities, and is an instruction tot eh executive to do certain activities during a given period.

  1. PUBLIC ADMINISTRATION

Public administration embraces services to the public. The needs of a community determine the services. All public institutions act if only they are given money. The annual state revenue is used by government to provide public services. Every public servant is involved in the process of public financial management. The process includes the demand for, receipt, expenditure and control of public money. Every civil servants have a duty to help to provide public services.

  1. ADMINISTRATION

Every public servant does his/her function well in a supportive administration. A supportive administration is the responsibility of either the functional official. The functions of an administrative official are classified by the administrative process which include policy making, organisation, recruitment, use of personnel, financing, procedural regulations and control. Administration can be regarded as a generic processes orientated to realisation of objectives in any public institution. Administration in this case refers to those generic processes present in any act by civil servants or political office bearers for the realisation of any objective, especially in financing

Ref: Prof Morais: Public Financial Administration page 9. UNISA.

  1. VALUE ENVIRONMENT

No public servant or political office bearer may, when handling public money, decide on any policy, make organisational arrangement handle personnel matters and funds as he/she likes. Values in the public sector have a direct bearing on the administrative process. Normative criteria influence the administrative process in the public sector. Financial management is a component is a component of the administrative process. The following normative criteria/factors have an influence on public financial management.

7.1Regard For Political Supremacy

All public servants carry on their duties in a political environment. During elections political party contend fr power. Each political party presents its election manifesto to the electorate. When a political party wins the election it is morally bound to implement the programme it stood for during the election. Political parties may lack the time and expertise to put their programme into action, parliament usually confines itself to indicating general guidelines by passing Acts, leaving the details to the executive for final decisions and implementation. The civil servants are responsible for exploring the feasibility of the policy and making recommendations to the politicians accordingly. The civil servants work is done in a political setting. All the levels of executive hierarchy is influenced by political supremacy.

7.2Public Accountability

The public sector relies heavily on revenue from public taxes for the implementation of its manifesto. Parliament is publicly accountable for its use of public money. Parliament in turn holds the executive responsibility for the use of the funds per its directions. Government officials must bear in mind that they are ultimately responsible to the legislature, which is in turn accountable to the public for the efficient deployment of funds.

7.3Efficiency

Efficiency is mainly oriented to service/advancement of public welfare, in the public sector. Efficiency in the public sector implies the careful consideration of administrative processes by which set goals are to be realised.

7.4Reasonableness And Fairness Requirements

The public sector must regulate relations of individuals and institutions in the provision of goods and services to the community. Some limitations, because of the welfare state concept, on some human rights and freedoms maybe called for. Government directly or indirectly dictates the actions of the people and their institutions. It is assumed that Zimbabwe is a democracy where public institutions act fairly, equitably, and reasonably or at least that legally its actions are above suspicion. Law and justice is said to prevail in Zimbabwe. As government activities increase, the principle of administrative law gains prominence as well, on both the macro and micro context levels where the actions of officials affect individuals. A public official must always remember that the principles of reasonableness and fairness (administrative law) are very important in his/her daily duties.

7.5Regard For Community Values

Public officials make value judgements in the course of their duties. Public officials are both in the service of the community and the community service must be respected during policy making, organising, financing, use of personnel, regulations for procedure and exercising of control in pursuit of institutional goals. The official may improve the performance of work after taking attention of the normative criteria.


Source: Prof D Marais: Public Financial Administration pg 12 - UNISA

7.6Other Values

Other values to be taken into consideration include religion, personal, education, background and origin play a part. The civil servants personal integrity (is a results of a set of values) is essential for proper control.

  1. PRIVATE SECTOR

It is generally accepted that the state is responsible for the general welfare of its people. The aim of government is to further the contentment and spiritual and material welfare of all in its midst. Material must be understood to mean economic welfare; hence economic welfare is one aspect of the general welfare of a country’s inhabitants. The participation of central government in the economic life of Zimbabwe refers to the following:

Government must put in place measures to promote economic growth. Because of special factors such as rapid population growth the depopulation of rural areas and the pursuit of a higher standard of living for all sections of the community, it has already become traditional for government to make economic growth a very important aim. The state promotes economic development in various ways:

i)By establishing strategic industries

ii)By providing the infrastructure and distributing it geographically and by providing basic research services.

iii)By providing specific industries with loan funds

iv)By applying fiscal incentives to stimulate growth in specific directions within the private sector

v)By guiding and coordinating the development of growth points, decentralising industry in general and planning for the whole country on a regional basis. (Adaptation from the Franszen Report, South Africa. Fiscal and Monetary policy in South Africa, Third report of the Commission of Inquiry into Fiscal and Monetary policy in South Africa. Pretoria: Government Printer, November 1970 pg. 7).

LEGISLATIVE INSTITUTIONS RESPONSIBLE FORPUBLIC FINANCE

CONSTITUTION OF ZIMBABWE PARLIAMENT

In terms of Sections 32 of the Constitution of Zimbabwe Revised Edition 1996, the legislative power of the country is vested in Parliament and the President.

PRESIDENT

The office of President created by the Constitution of Zimbabwe is that of executive Head of State. State that "there shall be a President who shall be Head of State and Head of Government and Commander in Chief of the Defence Forces and the President shall take precedence over all other persons in Zimbabwe. He/she is leader of a political party and chairpersons of the Cabinet. He may address a joint session of both Houses of Parliament, but has no vote in Parliament.

The President's election, tenure of office, functions and powers do not have any direct bearing on public financial management studies. The role of the President in Public financial administration is influenced by his/her position as an executive President. He/she is involved greatly in decision-making on public finance. He/ she has power to appoint the Ministers of Finance and Economic Development/ Planning. As Chairperson of Cabinet, he/ she takes a lead in making policy decisions on economic development of the state and in public financial management. The President advised by the national Economic Committee on the economic development ofthe country and also the Committee on National Priorities.

PARLIAMENT Parliament of Zimbabwe consists ofthe Houses of Assembly and Senate.

Parliamentary Control of Public Finance is divided into: -

(i) Control of Parliament by the electorate

(ii) Control by Parliament itself

(iii) Constitutional Control of Parliament's conduct of Public Finance

(iv) Parliamentary control of executive institutions and offices created by Parliament to deal with and control public finance

1. Controls over Parliament

The electorate in Zimbabwe has a right through general elections normally held every after five years to elect representatives to both Houses of Parliament (Section 63 of the Constitution of Zimbabwe 1996). By voting for representatives the electorate delegates the power to make laws for the government of the country. Members of Parliament are accountable to the electorate for the manner the country is run including the management of public finance. The electorate may control through: -

(a) appealing the members of Parliament or Ministers

(b) joining pressure groups

(c) use political party channels or

(d) resort to the public media
Control of Parliament involves party political control over its members and majority parties in Parliament. Public financial management is linked to party politics. A budget therefore will represent the ruling party politics. A budget therefore will represent the ruling party political objectives for any financial year. The basis principles in public financial administration are that all members / people have a right to express themselves freely and responsibly on the conduct and economic policy of elected representatives and that there can not be any taxation without representation. The provision of adequate public funds includes the creation of condition (political, economic, industrial, social and educational) conducive to economic progress.

2. Constitutional Control over Parliament

The constitution of Zimbabwe of 1996 contains specific provisions for the way public finance is handled by Parliament. Sections 101, 102, 103, 104 spell out how Parliament administers public finance. Public funds do not belong to Parliament or to the President but both institutions are bound by the Constitution to use this money to the greatest benefit of the people. The above sections are quoted below: -

CHAPTER XI FINANCE

101 Consolidated Revenue Fund

All fees, taxes and other revenues of Zimbabwe from whatever source arising, not being moneys that -

(a) are payable by or under an Act of Parliament into some other fund established for a specific purposes; or

(b) may, by or under an Act of Parliament, be retained by the authority that received them for the purposes of defraying the expenses of that authority; shall be paid into and from one Consolidated revenue Fund.

102 Withdrawals from Consolidated Revenue Fund or other public fund.

1)No moneys shall be withdrawn from the Consolidated Revenue Fund except -

(a) To meet expenditure that is charged upon that Fund by this Constitution or by an Act of Parliament; or

(b) Where the issue of those moneys has been authorized by an Appropriation or other Act made pursuant to the provisions of section 103.

2)Where any moneys are charged by this Constitution or an Act of Parliament upon the Consolidated Revenue Fund or any other public fund, they shall be paid out of that fund by the Government to the person or authority to whom payment is due.

3) No moneys shall be withdrawn from any public fund, other than the Consolidated Revenue fund, unless the issue of those moneys has been authorized by or under an Act of Parliament.

4) An Act of Parliament may prescribe the manner in which withdrawals may be made from the Consolidated revenue Fund or other public fund.

5) The investment of moneys forming part of the consolidated Revenue Fund shall be made in such manner as may be prescribed by or under an Act of Parliament.

6) Notwithstanding the provisions of subsection (1), provision may be made by or under an Act of Parliament authorizing withdrawals to be made from the Consolidated Revenue Fund for the purpose of making repayable advances.

103 Authorization of expenditure from Consolidated Revenue Fund.

1) The Minister for the time being responsible for finance shall cause to be prepared and laid before Parliament, on a day on which Parliament sits, before or not later than thirty days after the start of each financial year estimates of the revenue and expenditure of Zimbabwe for that financial year:

Provided that if, by reason of the prorogation or dissolution of Parliament, the provisions of this subsection cannot be complied with, the estimates of the revenue and expenditure shall be laid before Parliament on a day which Parliament sits not later than thirty days after the date on which Parliament first meets after that prorogation or dissolution.

2) When the estimates of expenditure, other than expenditure charged upon the Constitutional or an Act of Parliament, have been approved by Parliament, a Bill, to be known as an appropriation Bill, shall be introduced into Parliament providing for the issue from the Consolidated revenue Fund of the sums necessary to meet that expenditure and the appropriation of those sums, under separate votes for the several heads of expenditure approved, to the purposes specified therein.

3) If in respect of any financial it is found that the amount appropriated by the Appropriated Act to any purposes is insufficient or that a need has arisen for expenditure for a purpose to which no amount has been appropriated by that Act, a supplementary estimate showing the sums required shall be laid before Parliament and, when such estimates have been approved by Parliament, a supplementary Appropriation Bill shall be introduced into Parliament providing for the issue of such sums form the consolidated Revenue Fund and the appropriation of those sums, under separate votes for the several heads of expenditure approved, to the purposes specified therein.

4) An Act of Parliament may make provision for the President, where he is satisfied that there is an urgent need for expenditure which was unforeseen or the extent of which was unforeseen and for which no other provisions exits, to authorize the withdrawal from the Consolidated revenue Fund of moneys for the purpose of meeting that expenditure and any moneys so withdrawn shall be included in supplementary or additional estimates which shall be laid beforeParliament on one of the fourteen days on which Parliamentsits next after the authorization of such withdrawal and, when such estimates have been approved by Parliament, a supplementary or additional Appropriation Bill shall be introduced into parliament provided that the sums so withdrawn shall be charged upon Consolidated Revenue Fund and that they shall be appropriated , under separate votes for several heads of expenditure approved, to the purposes specified therein: provided that the aggregate of all moneys so authorized to be withdrawn shall not any time prior to the consequential estimates having been approved by parliament exceed one and one-half per centum of the total amount appropriated in the last main Appropriation