, PUB3705
OCTOBER/NOVEMBER
(PORTFOLIO) 2026
DUE 16 OCTOBER 2026
Portfolio Introduction
This portfolio examines critical aspects of public financial administration and management as
presented in the PUB3705 study guide and the prescribed textbook by Pauw (2025). The portfolio
addresses three key questions that explore the structural and procedural dimensions of managing
public money in South Africa. The first question analyses municipal structures and role players for
the management of municipal finances, examining both political and administrative structures, as
well as internal and external role players. The second question describes the structural aspects of
budgeting, focusing on the budget as part of the organisational planning process and the basis for
budgeting in the national and provincial spheres. The third question discusses the three main
stages of the tender process and identifies the challenges associated with each stage. Together,
these questions provide a comprehensive overview of how public money is planned, allocated,
managed, and controlled in the South African public sector. The discussion draws on practical
examples to illustrate the application of theoretical concepts and legislative requirements,
demonstrating the complexities and challenges inherent in public financial management.
, Question 1.1: Municipal Structures and Role Players for the Management of Municipal Finances
Introduction
The management of municipal finances in South Africa is a complex, multi-layered function that
requires the coordinated involvement of various structures and role players. According to the study
material, municipal financial management should be based on three approaches that must be
applied simultaneously: a limited resources approach, a policy implementation approach, and a
policy compliance and accountability approach (Pauw, 2025:248-249). These approaches inform
how the various structures and officials within a municipality interact to ensure sound financial
management. This discussion will examine both the political and administrative structures, as well
as the internal and external role players, illustrating each with practical examples.
Political Structures
At the political level, the municipal council is the primary structure responsible for formulating
policies, including all financially-related policies, and overseeing and monitoring the
implementation of those policies (Pauw, 2025:253). For example, a municipal council in a
metropolitan municipality such as the City of Johannesburg must approve the annual budget, set
tariffs for services such as water and electricity, and adopt credit control and debt collection
policies. The council exercises this authority through a majority vote, and its decisions have direct
financial implications for residents and businesses within its jurisdiction.
The Finance Portfolio Committee assists the council in arriving at certain policy decisions pertaining
to the management of the finances of the municipality, based on the recommendations of this
portfolio committee (Pauw, 2025:253). This committee must also oversee the management of all
the municipality's finances and make recommendations to the council regarding them, including
the preparation of financial statements. In practice, this committee would, for instance, scrutinise
the municipality's monthly budget statements before they are presented to the full council,
ensuring that expenditure patterns align with the approved budget.
The Municipal Public Accounts Committee (MPAC) is established in terms of section 79 of the
Municipal Structures Act and performs an oversight function on behalf of council (Pauw, 2025:253).
It consists of councillors, including those from opposition parties. Importantly, the MPAC is not a
duplication of other committees of council, such as the Finance Committee or the Audit Committee
(Pauw, 2025:253). The MPAC provides executive oversight over the executive according to the
separation of powers principle, similar to the Standing Committee on Public Accounts (SCOPA) at
national and provincial levels. For example, the MPAC has the right to call upon the accounting
officer of the municipality and the chairperson of a municipal entity's board of directors to appear
before it to provide information or clarity about unauthorised expenditure, irregular expenditure,
and fruitless and wasteful expenditure. A practical example would be the MPAC in the City of Cape
Town summoning the municipal manager to explain why the municipality incurred irregular
expenditure on a particular tender, and recommending consequences for those responsible.
OCTOBER/NOVEMBER
(PORTFOLIO) 2026
DUE 16 OCTOBER 2026
Portfolio Introduction
This portfolio examines critical aspects of public financial administration and management as
presented in the PUB3705 study guide and the prescribed textbook by Pauw (2025). The portfolio
addresses three key questions that explore the structural and procedural dimensions of managing
public money in South Africa. The first question analyses municipal structures and role players for
the management of municipal finances, examining both political and administrative structures, as
well as internal and external role players. The second question describes the structural aspects of
budgeting, focusing on the budget as part of the organisational planning process and the basis for
budgeting in the national and provincial spheres. The third question discusses the three main
stages of the tender process and identifies the challenges associated with each stage. Together,
these questions provide a comprehensive overview of how public money is planned, allocated,
managed, and controlled in the South African public sector. The discussion draws on practical
examples to illustrate the application of theoretical concepts and legislative requirements,
demonstrating the complexities and challenges inherent in public financial management.
, Question 1.1: Municipal Structures and Role Players for the Management of Municipal Finances
Introduction
The management of municipal finances in South Africa is a complex, multi-layered function that
requires the coordinated involvement of various structures and role players. According to the study
material, municipal financial management should be based on three approaches that must be
applied simultaneously: a limited resources approach, a policy implementation approach, and a
policy compliance and accountability approach (Pauw, 2025:248-249). These approaches inform
how the various structures and officials within a municipality interact to ensure sound financial
management. This discussion will examine both the political and administrative structures, as well
as the internal and external role players, illustrating each with practical examples.
Political Structures
At the political level, the municipal council is the primary structure responsible for formulating
policies, including all financially-related policies, and overseeing and monitoring the
implementation of those policies (Pauw, 2025:253). For example, a municipal council in a
metropolitan municipality such as the City of Johannesburg must approve the annual budget, set
tariffs for services such as water and electricity, and adopt credit control and debt collection
policies. The council exercises this authority through a majority vote, and its decisions have direct
financial implications for residents and businesses within its jurisdiction.
The Finance Portfolio Committee assists the council in arriving at certain policy decisions pertaining
to the management of the finances of the municipality, based on the recommendations of this
portfolio committee (Pauw, 2025:253). This committee must also oversee the management of all
the municipality's finances and make recommendations to the council regarding them, including
the preparation of financial statements. In practice, this committee would, for instance, scrutinise
the municipality's monthly budget statements before they are presented to the full council,
ensuring that expenditure patterns align with the approved budget.
The Municipal Public Accounts Committee (MPAC) is established in terms of section 79 of the
Municipal Structures Act and performs an oversight function on behalf of council (Pauw, 2025:253).
It consists of councillors, including those from opposition parties. Importantly, the MPAC is not a
duplication of other committees of council, such as the Finance Committee or the Audit Committee
(Pauw, 2025:253). The MPAC provides executive oversight over the executive according to the
separation of powers principle, similar to the Standing Committee on Public Accounts (SCOPA) at
national and provincial levels. For example, the MPAC has the right to call upon the accounting
officer of the municipality and the chairperson of a municipal entity's board of directors to appear
before it to provide information or clarity about unauthorised expenditure, irregular expenditure,
and fruitless and wasteful expenditure. A practical example would be the MPAC in the City of Cape
Town summoning the municipal manager to explain why the municipality incurred irregular
expenditure on a particular tender, and recommending consequences for those responsible.
