PUB2607
EXAM
PORTFOLIO
DUE DATE:MAY-JUNE
2025
, QUESTION 1
1.1 Explain the link between the Public Finance Management Act and Treasury
Regulations in your own words and demonstrate understanding with examples.
(20 Marks)
The Public Finance Management Act (PFMA) is the foundational legal framework that
governs how public finances are managed in South Africa. It aims to ensure
transparency, accountability, and sound financial management in government
institutions. The PFMA applies to national and provincial departments, public entities,
constitutional institutions, and Parliament.
Treasury Regulations are issued under the authority of the PFMA by the National
Treasury. These regulations provide detailed guidelines and procedures for
implementing the PFMA. In essence, they operationalise the principles and rules set out
in the PFMA.
🔗 The link between the PFMA and Treasury Regulations is that the PFMA sets the
what (legal framework and financial management goals), and the Treasury Regulations
provide the how (procedures and detailed instructions to achieve those goals).
✅ Example 1:
PFMA requires that departments must maintain effective, efficient, and transparent
systems of financial and risk management.
👉 Treasury Regulation 3.2.1 specifies that departments must establish and maintain an
internal audit function that operates in terms of an internal audit charter.
✅ Example 2:
PFMA states that accounting officers are responsible for ensuring that departments or
entities operate within their budgets.
👉 Treasury Regulation 8.1 requires departments to manage budgets through
expenditure control mechanisms such as monthly cash flow projections.
EXAM
PORTFOLIO
DUE DATE:MAY-JUNE
2025
, QUESTION 1
1.1 Explain the link between the Public Finance Management Act and Treasury
Regulations in your own words and demonstrate understanding with examples.
(20 Marks)
The Public Finance Management Act (PFMA) is the foundational legal framework that
governs how public finances are managed in South Africa. It aims to ensure
transparency, accountability, and sound financial management in government
institutions. The PFMA applies to national and provincial departments, public entities,
constitutional institutions, and Parliament.
Treasury Regulations are issued under the authority of the PFMA by the National
Treasury. These regulations provide detailed guidelines and procedures for
implementing the PFMA. In essence, they operationalise the principles and rules set out
in the PFMA.
🔗 The link between the PFMA and Treasury Regulations is that the PFMA sets the
what (legal framework and financial management goals), and the Treasury Regulations
provide the how (procedures and detailed instructions to achieve those goals).
✅ Example 1:
PFMA requires that departments must maintain effective, efficient, and transparent
systems of financial and risk management.
👉 Treasury Regulation 3.2.1 specifies that departments must establish and maintain an
internal audit function that operates in terms of an internal audit charter.
✅ Example 2:
PFMA states that accounting officers are responsible for ensuring that departments or
entities operate within their budgets.
👉 Treasury Regulation 8.1 requires departments to manage budgets through
expenditure control mechanisms such as monthly cash flow projections.
