Role of the Central Government in the Financing of Public Institutions
Control of Purchases and Purchasing procedure – the Treasury controls this through a State Tender Board (find out what this is) – all the buying of stock, equipment, machinery, etc., which includes the renting of property for occupation by officials and staff members.
Control of Stock and Stores – the control of stock in warehouses and stores is vital because large amounts of stock (equipment and goods) representing vast amounts of money are invested here. As soon as stock is withdrawn, the amount is debited against the expenditure account of that department (budget vote). A manual with detailed procedures is usually compiled by the Treasury for efficient and effective control of all stock in each store and/or warehouse.
Dispensation Function (an exemption or change from the usual) – the Treasury has authority to grant dispensation which is given to it by The Legislature. This means it has the power, according to Gildenhuys (1993:131), to approve: • remissions, as an act of grace, of moneys due to the State; • refunds of revenue as an act of grace; • payments, as an act of grace, from the State.
The Treasury acts as an impartial body to avoid corruption, malpractice and to ensure uniform (equal) policy throughout the administration. It would be unfair to leave this authority to the Accounting Officers of each department as corruption and unfair practice might be too much of a temptation. All approvals of dispensations are reported by the state auditor in his annual report to The Legislature, and the Treasury is expected to explain all its approvals of dispensation to the Public Accounts Committee. It is also normal for Parliament to allow the Treasury this power to grant dispensation within a certain monetary limit – should a dispensation exceed this amount, it is referred to Parliament for approval.
Local Government Level It has already been pointed out that the finance committee under the leadership of its chairperson controls the financial administration on behalf of local Legislature (the Council).
Cowden (1969:323) has identified the functions of the finance committee at local government level which include the following: • Keeping of financial records; • Collection/payment of all money due to and by the council; • Registration of loans and interest payments of the loans; • Management of all funds and investments; • Recording of capital assets and depreciation (decreasing value) thereof; • Purchasing and safekeeping of all stores and materials.
Control Measures Exercised Over Local Government The following control measures are, according to Gildenhuys (1993:132) necessary:
Statutory Control of the Finance Committee There exist certain control measures which serve to protect local taxpayers and also to provide guidelines to local councillors – it should be remembered that often ordinary people are elected into important positions – although it is advisable that such people should be experts, it is often unreasonable to expect every elected councillor to have the necessary knowledge to act on his/her own when it comes to public finance. Gildenhuys (1993:132) says the control of public finance at local government level has two dimensions: • External – control directives and rules from the central/regional government; • Internal – control measures/directives in local bylaws and regulations.
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