MINISTRY OF FINANCE AND ECONOMIC DEVELOPMENT€¦ · MoHA Ministry of Home Affairs ... MINISTRY OF...

MINISTRY OF FINANCE AND ECONOMIC

DEVELOPMENT

Southern Region Workshop Report on the Alignment of

Legislation to the Constitution of Zimbabwe, 2013:

Public Finance Management Act [Chapter 22:19]

Rainbow Hotel, Bulawayo

9 & 10 November 2016

Prepared By:

INTER-MINISTERIAL TASK-FORCE ON THE IMPLEMENTATION OF THE

CONSTITUTION (IMT) TECHNICAL COMMITTEE

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Acronyms

CALR Centre for Applied Legal Research

IMT Inter-Ministerial Taskforce on Alignment of Legislation to the

Constitution

JSC Judicial Services Commission

LDC Law Development Commission

MoFED Ministry of Finance and Economic Development

MoHCC Ministry of Health & Child Care

MoJLPA Ministry of Justice Legal and Parliamentary Affairs

MoHA Ministry of Home Affairs

MoPSE Ministry of Primary and Secondary Education

MoYIEE Ministry of Youth, Indigenisation & Economic Empowerment

NRZ National Railways of Zimbabwe

UNDP United Nations Development Programme

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Contents 1. BACKGROUND ........................................................................................................................... 1

2. INTRODUCTION ......................................................................................................................... 1

3. STAKEHOLDER PARTICIPATION ........................................................................................ 2

1.1 Programme of the Workshop ................................................................................................ 2

4. DAY 1 PROCEEDINGS ............................................................................................................... 4

4.1 ...................................................................................................................................................... 4

Opening Remarks ............................................................................................................................... 4

4. 2 ...................................................................................................................................................... 4

Background to the law-making process ............................................................................................ 4

4.3 Objectives of the Workshop ......................................................................................................... 4

5. BACKGROUND AND UPDATE OF ALIGNMENT PROCESS ............................................ 5

6. CONSTITUTIONAL PROVISIONS RELATING TO PUBLIC FINANCE

MANAGEMENT .................................................................................................................................. 5

7. PLENARY SESSION ................................................................................................................... 6

8. THEMATIC GROUP DISCUSSIONS & REPORT BACK ..................................................... 6

8.1 Day One - Thematic Group Discussions ..................................................................................... 6

8.1.1 Constitutional Provisions ....................................................................................................... 6

9. DAY 2 PROCEEDINGS ............................................................................................................. 14

9.1 Alignment of the Public Finance Management Act and Other Relevant Proposed Changes to

the Act ............................................................................................................................................... 14

10.1 Day Two - Thematic Group Discussions ................................................................................. 17

10.2 Plenary session ......................................................................................................................... 21

CONSOLIDATION OF SESSION PROCEEDINGS AND WAY FORWARD ........................... 24

1. BACKGROUND

In May 2013, Zimbabwe adopted a new Constitution. As a result of the enactment of the new

Constitution, existing legislative provisions which were founded in line with the old

Constitutional are unconstitutional, and are in need of being aligned with the provisions of

the Constitution of Zimbabwe. The Ministry of Justice, Legal and Parliamentary Affairs

(MoJLPA) has been tasked with the role of coordinating the process of alignment of

legislation with the new Constitution in terms of Section 324 which provides that ‘all

constitutional obligations must be performed diligently and without delay.’

In pursuit of this, the MoJLPA with the technical support of the Centre for Applied Legal

Research (CALR) established an Inter-Ministerial Task force on the Alignment of Legislation

to the Constitution (IMT) as an institutional platform to facilitate the implementation of the

Constitution of Zimbabwe to ensure that all legislation is consistent with the Constitution.

The overall objective of the IMT led project entitled ‘Implementation of the Constitution in

Zimbabwe: Supporting the Constitutional Legislative Alignment Process’ is therefore to

support the Constitutional Legislative Alignment Process in Zimbabwe.

2. INTRODUCTION

The Ministry of Finance and Economic Development (MoFED) submitted a request for

support in aligning the Public Finance Management Act [Ch. 22:19]. The project provided

technical research support in the review of the Act for purposes of identifying legislative gaps

therein that are inconsistent with the Constitution and International Conventions and Treaties

relating to public finance management that the Government of Zimbabwe is party to. The

research findings were outlined in a Discussion Paper, which was submitted to the Technical

Committee and the MoFED.1 Following the development of the Discussion Paper, the

project also supported the holding of stakeholder consultation workshops to obtain

stakeholder input on the document. The Southern Region stakeholder consultation workshop

was held at Rainbow Hotel in Bulawayo on the 9th and 10th of November 2016.

1 Annexure 1 – Discussion Paper on Alignment of the Public Finance Management Act [Ch. 22:19]

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3. STAKEHOLDER PARTICIPATION

Stakeholders that participated in the consultative workshop were composed of various

government Ministries including Ministry of Health and Child Care, Ministry of Primary and

Secondary Education, Ministry of Finance and Economic Development, Ministry of Justice,

Legal and Parliamentary Affairs, Ministry of Youth, Indigenisation and Economic

Empowerment, Ministry of Home Affairs, IMT, Judicial Service Commission, academics,

Transparency International Zimbabwe, National Railways of Zimbabwe, Law Development

Commission, Bulawayo Agenda, Zimbabwe School of Mines, media representatives (Star

FM, Newsday, Chronicle) and Centre for Applied Legal Research.

3.1 Programme of the Workshop

The workshop was held over a two-day period. The details of the workshop programme are

outlined below:

MINISTRY OF FINANCE AND ECONOMIC DEVELOPMENT

STAKEHOLDER CONSULTATIVE WORKSHOP ON THE ALIGNMENT OF

LEGISLATION:

DRAFT PUBLIC FINANCE MANAGEMENT AMENDMENT BILL

Rainbow Hotel, Bulawayo 9 & 10 November 2016

DAY ONE

TIME ITEM PRESENTER/

FACILITATOR

08:30-09:00 Registration Inter-Ministerial Taskforce

(IMT) Technical Committee

09:00-09.15 Introductions Facilitator

09:15-09:30 Opening Remarks Ministry of Finance and

Economic Development

(MoFED)

09:30-09:45 Background to the Law Making Process IMT Technical Committee –

Legislative Drafting

09:45-10:00 Objectives of the Stakeholder Consultative

Workshop

MoFED

10:00-10:30 TEA BREAK

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10:30-11:30 Constitutional Provisions Relating to Public

Finance Management

Dr. Muvingi,

IMT Technical Expert

11:30-12:00 PLENARY SESSION Facilitator

12:00-13:00 Introduction to Thematic Group Discussions Facilitator/MoFED

13:00-14:00 LUNCH BREAK

14:00-15:00 Thematic Group Discussions ALL

15:00-15:30 TEA BREAK

15:30-16:00 Report Back Group Rapporteur

16:00-16:30 PLENARY SESSION Facilitator

16:30-16:40 Close of Day 1 MoFED

DAY 2

TIME ITEM PRESENTER

08:30-09:00 Registration Inter-Ministerial Taskforce

(IMT) Technical Committee

09:00-09:15 Recap of Day One Facilitator

09:15-10:00 Alignment of the

Public Finance Management Act [Chapter 22:15]

& Other Relevant Proposed Changes to the Act

Dr Muvingi,

IMT Technical Expert

10:00-10:30 TEA BREAK

10:30-13:00 Thematic Group Discussions Facilitator

13:00-14:00 LUNCH

14:00-14:30 Report back Group

Rapporteur/Representative

14:30-15:00 PLENARY SESSION ALL

15:00-15:30 TEA BREAK

15:30-15:45 Consolidation and Way Forward IMT Technical Committee

15:45-16:00 Closing Remarks and Vote of Thanks MoFED

DEPARTURE ALL

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4. DAY 1 PROCEEDINGS

4.1 Opening Remarks

The Deputy Accountant General of the MoFED, welcomed participants to the workshop.

He took the opportunity to thank IMT for facilitating & hosting the stakeholder consultative

workshop, which he said reflects the strong sense of commitment in assisting government in

aligning acts to the Constitution. Noting that the PFMA was promulgated in 2010 while the

new Constitution came into force in 2013, he stated that the workshop was designed to elicit

valuable input from stakeholders and for them to articulate their expectations of what should

be in the Act. He added that stakeholder input would be submitted to relevant government

authorities for further scrutiny before being incorporated into the Bill to be drafted by the

Attorney General’s office.

Participants were challenged to actively critique the presentations and contributions in order

to come up with the best product. The presenter expressed hope that the discussions would

enrich the process and help the Ministry to create a watertight framework for managing

public finances in Zimbabwe.

4.2 Background to the law-making process

A Law Officer from the Attorney General’s Office (Legislative Drafting Division) outlined

the law making process as it related to the Constitutional alignment process. She stated that

law reform entails making the law better than what it was in its current state, a process which

involved changing and updating laws, so that they reflect the current values and needs of

modern society.

4.3 Objectives of the Workshop

Overall, the objectives of the workshop were as follows:

(a) To gather stakeholders’ views, comments and recommendations on the alignment of

the PFM Act with the Constitution of Zimbabwe.

(b) To ensure that the provisions of the PFM Act were consistent with the Constitution

(c) To create a platform for increased engagement and impart knowledge about the

Constitutional alignment process.

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4.4 BACKGROUND AND UPDATE OF ALIGNMENT PROCESS

A law Officer from the LDC and IMT presented the background of the alignment process, the

role of IMT and progress made thus far in legislative alignment. The presenter submitted that

there is legislation that has already been aligned to the Constitution such as the Land

Commission Bill. Furthermore, it was submitted that the Ease of Doing Business project was

complementing the alignment project as 13 pieces of legislation been fast tracked for legal

reform, while many Bills were now at the consultative stage.

4.5 CONSTITUTIONAL PROVISIONS RELATING TO PUBLIC FINANCE

MANAGEMENT

An IMT Technical Expert gave a presentation which pointed out the provisions of the

Constitution as the supreme source of law, relating to the subject area of public finance

management. She observed that there is need to keep updating systems and frameworks as

things continue to change nationally and regionally & internationally.

The following issues were highlighted on:

- Chapter 17 on Finance (Financial Management, Consolidated Revenue Fund,

Authorisation of Expenditure, Consolidated Revenue Fund, Safeguarding of Public

Funds and Property, Auditor General and other General matters)

- Chapter 2 on National Objectives, including;

Section 9: Good governance

Section 13: National development

Section 14: Empowerment and employment creation

Section 17: Gender balance

Section 18: Fair regional representation

Section 34: Domestication of international instruments

- Chapter 4 on the Declaration of Rights, particularly section 56 (equality and non-

discrimination)

- Chapter 9 on Principles of Public Administration and Leadership, particularly

section 194 (basic values and principles governing public administration)

It was submitted that public finance should serve the public above all, underscoring the

importance of having proper controls, transparency, accountability, as well as value for

money.

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4. PLENARY SESSION

In the ensuing discussions, participants discussed several issues, primarily the fact that

retention funds are covered under section 18 of the PFM Act. Moreover, the practicality of

the reference in section 309(2)(c) of the Constitution, where the Auditor General can “order

the taking of measures to rectify any defects in the management and safeguarding of public

funds and public property” was debated. Participants noted that in practice and from

experience, this had not been possible. Therefore, it was suggested that the word “order”

should be included in the Act as it had Constitutional backing. Ministry officials needed to

explain the practical difficulties that they were facing in this area. For example, it was

observed that some ministries would respond to such directives by simply saying “point

taken, measures being implemented”, yet this would not ensure compliance. Generally, the

Auditor General has had to rely on a persuasive approach which is not always effective.

Therefore, it would be important to specify such non-compliance as an act of misconduct.

5. 2THEMATIC GROUP DISCUSSIONS & REPORT BACK

The participants were divided into groups to discuss and provide recommendations on

specific issues. It was emphasised that this was anopportunity to add value to the law making

process, since it was in their interest to make these laws better for themselves and for their

children. The thematic areas and questions were as follows:

8.1 Day One - Thematic Group Discussions

8.1.1 Constitutional Provisions

GROUP 1 FINANCIAL MANAGEMENT (PART 1)

a) Parliamentary oversight of state revenues and expenditure (section 299)

What mechanisms should Parliament use to carry out the duties of monitoring

& oversight over revenue and expenditure by the State (including all

Commissions; institutions and agencies of government at every level; statutory

bodies; government-controlled entities; provincial and metropolitan councils

and local authorities)?

Apart from mere submission of annual budgets and financial performance

reports, what other obligations should be placed on the State?

b) Allocation of revenue between provincial and local tiers of government

(section 301)

What mechanisms should be used to ensure equitable allocation of capital

grants between provincial and local tiers of government?

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How should the “not less than five percent” provision be enforced? (Section

301(3) of the Constitution)

GROUP 2 CONSOLIDATED REVENUE FUND (PART 2)

a) Does the PFM Act provide adequate controls on funds paid into some other

fund established for a specific purpose, or funds retained by Authorities in

order to meet the authority’s expenses?

b) If not so, how can these be strengthened and what are the provisions that

should be included?

c) Are the provisions relating to ensuring that money withdrawn from the CRF is

paid only to the person to whom the payment is due, sufficient? If not what

other provisions do you recommend?

d) Critically examine the provisions on withdrawals of money from other public

funds.

GROUP 3 AUTHORISATION OF EXPENDITURE FROM CONSOLIDATED

REVENUE FUND (PART 3)

a) Identify gaps in the provisions on appropriations from CRF and propose

amendments.

b) nalyse the provisions relating to budget formulation and make

recommendations for how they can be enhanced.

GROUP 4 SAFEGUARDING OF PUBLIC FUNDS AND PROPERTY (PART 4)

a) Are the provisions on the safeguarding of public funds and public property

sound and adequate?

b) If not, which areas need to be improved?

c) In Part 1 of Chapter 17 of the Constitution on the principles of Public

Financial Management, discuss and list the areas in which each of these

principles should be embedded, and why?

GROUP 5 AUDITOR GENERAL (PART 5 AND 6)

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a) Are the provisions adequate? If not, how can they be improved?

b) Is the PFM Act harmonised to the provisions in the Procurement Act?

c) If not, which areas require harmonisation?

d) Identify the shortcomings in the PFM Act provisions relating to Corporate

Governance within state entities and suggest improvements

The groups gave the following feedback and recommendations:

GROUP 1

a) Parliamentary Mechanisms

Justified budget of state and state institutions must be presented to Parliament.

Approval of budget by the Parliamentary Committee

Address of lack of independence of internal auditors

Through establishment of effective Audit Committees in line with

recommendations of Corporate Governance and identification of best practices

i.e Angola

Submit monthly, quarterly, yearly reports on actual expenditure follow up on

these fiscal reports

b) Other Obligations placed on the state

Condonation of unauthorized expenditure in public institutions where cash is

collected e.g schools and hospitals

Publish accounts of State Institutions (of actual expenditure) in Government

gazette, chronicle, herald to address the issue of transparency and

accountability

Ministerial Directives that have financial impact on Parastatals should be

approved by the Parliamentary Public Accounts Committee e.g bonuses and

cancellation of ZESA and water bills

The Code on corporate governance should apply to the State and private sector

in order to address issues of unethical conduct. E.g barring unmonitored

appointment of members to Boards by Ministers

c) Mechanism to ensure equitable allocation of capital grants

Incorporate provisions of sections 301 of the Constitution into the Act

as per the recommendations of the draft Bill

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Allocation of capital grants according to the population revenue base

and financial needs specified in the budget of the province or local

authority.

d) 5%

The 5% or more should be allocated according to the revenue collection

of the particular province or local authority.

Publication of the financial statements of the provinces and local

authorities is necessary to verify actual income generated.

GROUP 2

a) Section 18 of the PFMA states:

If it is desirable that a fund be established Treasury should draw up a

constitution that will:

i) Specify the objects of the fund and the money to be payable into the fund

ii) Shall provide for the payments which may be made out of the fund

iii) Provide for such other matters as are considered to be necessary

Weaknesses:

i) Lack of time limit

ii) No review of the constitutions

iii) Lack of Treasury approval for transactions relating to the fund

iv) Lack of penalties for nonadherence

b) There should a time limit for the operations of the fund

The constitutions should be reviewed periodically

Need for Treasury approval for transactions relating to the fund

Nonadherence should lead to criminal proceedings

c) The controls on withdrawal from the CRF are sufficient according to section 17 of

the PFMA

d) According to section 18 of the PFMA moneys can be withdrawn if it is to meet the

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objectives of the constitution however the following need to be taken into account:

i) Need for Treasury approval for transactions relating to the fund

GROUP 3

A) Identify gaps in the provisions on appropriations from CRF and propose

amendments

GAP 1: In s 28 the Act is not making it mandatory for the grant aided

institutions to have their revenue and expenditure estimates stated

separately

RECOMMENDATION: to align it to the Constitution in terms of s305 (3)

(a)-(e)

GAP 2: S26 &29 of the Act- the powers of the president and relevant

Minister over the CRF appear to be same

RECOMMENDATION: there is need to align the Act with the

Constitution in terms of s306 (i)

GAP 3: In s26- there is no limit as to the maximum amount the President

can authorise

RECOMMENDATION: align it to s306(1) (a)

GAP 4- It’s not mentioned in Act on how we deal with unauthorised

expenditure

RECOMMENDATION: the Act need to be aligned in terms s307 of the

Constitution.

(B)Analyse the provisions relating to budget formulation and make recommendations

for how they can be enhanced

RECOMMENDATIONS

Budget formulation is supposed to have wider consultations involving all

relevant stakeholders for example CSO’s, citizens among others important.

Programmes which affect people’s lives should be given priority ie hospitals,

roads, water systems among others.

After wider consultations, the budget should be consolidated at provincial and

national level

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GROUP 4

A. To a larger extent, the provisions of the Act are generally lacking in so far as

provisions relating to public funds and public property are concerned. The Act

does not directly address the aspect of safeguarding public funds or property,

serve by inference.

B. WHICH AREAS NEED TO BE IMPROVED?

• As a starting point, the Act does not define what public funds and public

property means as defined in the Constitution –s308(1), whereas the

Constitution in terms of part 4, Chapter 17, clearly spells out provisions on the

safeguarding of public funds and public property.

• Where there are breaches in the use of public funds and public property the

Constitution talks about punishment and the possibility of recovery of the funds

or property. This is in line the provisions of s12 of the PFM Act .

• As regards Ministerial directives in terms of section 14 of PFM Act, there is

need for the Minister or Deputy Minister to put the directive in writing formally

authorising the officer. This should be done to safeguard the funds by making

sure that the Minister’s conduct is transparent and he or she is accountable for

all his action which should always be in line with the empowering law.

Principals should not be above the law.

• Section 87 of the PFM Act lays out the disciplinary procedures to be taken in

the event of financial misconduct, but the section is silent on the recovery of the

funds. The Act simply says the officer shall be investigated, heard and disposed

of. There is need to safeguard the funds by putting in place deterrent measures

such as restitution.

C. List of areas in which each of the principles under Chapter 17 of the

Constitution should be embedded

-In terms of 298 (c)- the burdens and benefits of the resources must be shared equitably

between the present and future generations

-the Act must clearly identify resources to be reserved for future generations e.g.

mineral resources.

-s298(f) public borrowings - all transactions involving national debt must be carried

out transparently and in the best interest of all Zimbabweans

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• The Act should have a clear clause for the State not to over-borrow or borrow

for recurrent expenditure e.g. borrowing to pay bonus but should borrow for

capital and infrastructure development

• In the Act there should be a clause which compels all members who make

borrowings from government institutions to pay back or face punitive measures.

GROUP 5

1. In Section 81 (1) of the PFM Amendment Bill, the groupsuggested that the

wording should be similar to that of section 309(20)(a) of the Constitution, that

is with reference to names of the institutions.

2. Section 81 of the PFM Amendment Bill should adopt section 309 (2) (c) of the

Constitution. Instead of “bringing to the attention of…” we suggest that the

Auditor General should have powers “to order…” as enshrined in the

Constitution. The Bill should empower the Auditor General in a clear &

unambiguous manner.

3. Section 50 of the PFM Amendment Bill should be expanded so that corporate

governance is clearly defined. One suggestion is to use section 316 of the

Constitution which talks about term limits for CEOs.

28.2 Plenary session

In the ensuing discussions, participants highlighted on the following:

Comment/Issue Response

On Group 1’s presentation

Clarification – under b), condonation –

relates to where cash is collected at a

particular institution.

All expenditure must be justified and

accounted for

On Group 2’s presentation:

There are adequate controls, but there are

some weaknesses.

Section18 Emphasis on approval – what

format would this approval take, given the

volumes? Approving each and every

Proposed approvals for expenditure or

transactions are good but would be difficult

given the sheer volumes of transactions and

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transaction one would take a long time.

Is there any such thing as constitution of

funds.

Retention funds – how can accountability be

improved & measured

On expenditure- should Act state that if an

asset is to be acquired, there should not be

use of part budgeted and part fund?

the modalities would need to be worked out

In order to improve accountability in

retention funds, they should be compelled to

produce budgets for Treasury approval so as

not to divert from their mandates

Compel them to produce budgets which

Treasury should approve. Some now spend

haphazardly. This measure would be good

from an audit point of view


The title is wrong, should be s19

Wider consultations are currently being

done for the budget process – how far are

these actually being taken on board as part

of the budget?

Every different group has its own

expectations. The interests of all

stakeholders will never coincide, but the

consultative process helps the owners of the

program to know where people are at

There is a limit in section 26(3) on what the

It was recommended that there be a

platform where those that have

contributions to the budget can submit them,

although they then need to be evaluated

since not every submission will be

suitable/relevant. However, at least efforts

will have been made to hear what people are

saying.

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President can authorise


On borrowing, check with provisions of

Public Debt Management Act – penalties

are there, limits/justifiable reasons, but

borrowing for paying bonus is not covered

by that.


How can the Auditor General “order”?

Where does the backing/authority come

from?

PFMA still speaks of Comptroller – should

now say Auditor General.

It comes from the Constitution, which says

that. (all things being equal)

The General Laws amendment may already

have taken care of the change of terms.

. DAY 2 PROCEEDINGSM

9.1 Alignment of the Public Finance Management Act and Other Relevant Proposed

Changes to the Act

The presenter provided a detailed review of the PFM Act itself, making reference to

international best practice as well as the PFM statutes of other countries. She gave a

definition of PFM as the set of laws, rules, systems & processes used by sovereign nations to

mobilise resources, allocate public funds, undertake public spending, account for the funds

and to audit the results (Lawson, 2015). She proceeded to outline the legal & regulatory

framework around public finance management in Zimbabwe, comprising the Constitution,

Acts of Parliament, subsidiary legislation (including treasury instructions, account procedures

manual & account officers instructions) and looked at the gaps in the Act that must be

addressed and clarified as the Act is aligned. She also reiterated the need for equity as

opposed to equality in the allocation of public resources.


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After the presentation, participants made the following observations and comments:

Comment/Issue Response

One participant asked whether the30-60 days

period to submit is not sufficient in this day and

age of IT, considering when it was prescribed

there was not much use of IT.

WConsidering the need to create guidelines for

allocation of budget, can these specifics be set out

in the PFM Act?

The PFM Act defines wasteful & fruitless

In response it was stated that there are

currently manual systems at school &

district level. Usually only the head

offices and sometimes provincial

level are computerized but at

decentralised local levels this still has

to be done manually

It was further noted that it is

important that tohave positive

development in the country and

people do notirresponsibly spend

money especially with scarce

resources. There is, however, need to

guide people on how to spend, Need

to achieve value for money.

To ensure prioritization of key issues

such as health, water, etc. Right now,

the money is going elsewhere where

it is not adding any value at all. The

peoples should agree on where it can

go where it is most productive and

beneficial for everyone

The policymakers are the ones with

the mandate, it remains with the

sitting government.

Sometimes law is also made through

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expenditure. Do broader allocation issuesneed to

be incorporated in the Act ?

Who says this or that is the ideal distribution?

We must be cognizant of the law. Does it mean

that putting down everything in the law is the

panacea to our problem?

judicial pronouncements. The PFMA

will prescribe what should be done.

If it does not happen then there are

sanctions against the person who

would have failed. There are also

administrative measures that should

be taken into account. It is assumed

that a government is there for the

good of the people, and the law will

create clear rights and applications.

But there are other areas that require

administrative measures that are not

necessarily provided in the law. Will

that criteria be consistent over the

years, because things can change, one

year there may be need to allocate

more to education than health because

of the circumstances. That is where

the admin measures come in. Also,

through the mechanisms for coming

up with a budget, people can input

into the process. Changing the law

can take years, so there must be an

easier way to allow for adaptation.

It may not be advisable to fix policy

issues in the Act itself so that they

remain adaptable.

Given the reality of the slow pace of

computerization and automation in

Zimbabwe, especially for

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On computerization –There are ad hoc silo

approaches, which are very difficult to

consolidate. There is need for a realistic period for

submitting budgets & accounts, not something

artificial which ministries cannot attain anyway

(about the 30-60 days).

decentralised ministries, one had to

appreciate that manual systems

required realistic periods of time to be

set for submission of budgets and

reports.

10. THEMATIC GROUP DISCUSSIONS & REPORT BACK

Participants were put in groups to discuss the individual parts of the current PFM Act and to

propose recommendations for their alignment with the provisions of the Constitution as

outlined in previous sessions:

10.1 Day Two - Thematic Group Discussions

PROPOSED AMENDMENTS TO PFM ACT

Examine and make concrete recommendations for the following provisions-

GROUP 1 AUDIT AND GENERAL (Part 8 & 10 of Act)

GROUP 2 PARLIAMENTARY OVERSIGHT; STATE ENTITIES;

PROVINCIAL, METROPOLITAN AND LOCAL COUNCILS

GROUP 3 FINANCIAL REPORTING (Part 4 of Act)

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GROUP 4 NATIONAL BUDGET (Part 3 of Act)

GROUP 5 CONTROL AND MANAGEMENT OF RESOURCES (Part 2 of Act)

Below is a table highlighting the discussion points and recommendations that were made by

the groups:

GROUP 1

Section 80 – Internal Auditors

• Internal Auditors must report to an audit committee instead of the Ministry to

facilitate independence of the internal auditors and to promote impartiality (Current

practice is that Internal Auditors are reporting to the people they are auditing)

• Provide sufficient budget/allowances to the Internal Auditors in order to facilitate

timely verification of accounts/financial statements.

Secton 81 – Internal Auditors

• Align s80 (5), s81(1) and s81(2) to the Constitution Chapter 17 with regard to

striking out the term Comptroller from the provisions.

• Amend and align s81 to Chapter 17 of the Constitution with reference to inclusion of

the provision relating to the audit of all provincial and metropolitan provinces of all

local authority as per the recommendations.

• Align s81 to s306 of the Constitution, especially s309 (1) (d), orders of the Auditor

General. Also state/include sanctions/measures to be taken against accounting

officers or Treasury in the event of failure to comply with recommendations or orders

of the Auditor General.

Section 83

• Amend and align section as per recommendation.

Section 84

• Section 84(1) - there is no clarity with reference to appointment of audit committee

members a provision similar to s314 of the Constitution may be included in the Act

to address- a) who actually appoints the audit committee members b) on what

grounds/qualifications c) remunerations and allowances

Part X: General

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Section 90 unclaimed money

• Clearance of Temporary deposits to National Revenue

Section 90(1) period of six years is reasonable because in practice the process takes long

periods to be cleared e.g. court cases, NSSA claims and process of claiming money back

from Treasury is cumbersome because refunds are not included in current budgets.

• Section 90(3) Notice of a deposit of unclaimed money

Notice should be published in all forms of media to enable affected persons to make claims

within a specified period. Not many people have access to the Gazette.

GROUP 2

Parliamentary Oversight

• Two committees that monitor public funds are Finance and Economic Development

and Public Accounts Committee

• Roles and responsibilities of the above committees must be included in the PFMA.

• The PFMA must cite statues that relate to parliamentary business

• Penalties for not complying with parliamentary statutes should be cited in the PFMA.

State Entities

• It should be included in the PFMA the appointment of audit committees for state

entities and their composition.

• The PFMA should cross reference to Chapter 9 Section 194-192 of the constitution.

• Term limits for the Chief Executive Officer

• Officers to make regular disclosure of their assets

• Codes of conduct should be included for public officers

• Corporate governance code should be cited and observed

Provincial, Metropolitan & Local Councils

• Section of the PFMA should be amended to include provincial, local and

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metropolitan councils

• Allocation of revenues should be according to section 301 of the constitution

• Amend section 83 to include provincial, local and metropolitan on submission of

audited financial statements

• Part IV of the PFMA should also include financial statements prepared by provincial,

metropolitan and local councils

• Definition of local, metropolitan and provincial council to be include under

definitions

GROUP 3

RECOMMENDATIONS

Section 32 (2) – Participants suggested that section 32 (2) should be moved to s35(6)

(b) where the Auditor General would have received the accounts which should be

audited within a specified period as stated under section 32.

Section 35 (5) needs to be repealed because it is in conflict with the provision of the

Constitution in terms of s298(1)(a).

It wassuggested that there is need to insert s36(c) which will juxtapose financial

statements of the previous years to the current year for the purposes of establishing

trends; monitoring and evaluation.

Section 37- the heading should be changed to “ Preparation and presentation of

financial statements”

The group suggested that section 37 should be repealed and substituted with “The

preparation and presentation of financial statements should be in accordance with the

guidance provided by Public Accountants and Auditors Board Zimbabwe (PAABZ).

S38(1)-should not only be published in the government gazette but also in the widely

circulated print media( for purposes of transparency

GROUP 4

• 28(1) No amendment recommended

• Section 28 (2) of the PFMA must be aligned to the constitution 305 (2). The Act does

not give specific time frame when the budget should be presented before the National

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The participants made the following contributions during the plenary session:

Issue/Comment Response

On Group 1 presentation

Why is there recommendation for internal auditors

to report to Committee not Ministry?

The purpose of reporting to the

Minister is for them to know whether

they are doing things in the right way.

What will the Committee do with the

report?

Assembly, while the Constitution specifically states that it should be presented on a

day on which the Assembly sits before or not later than thirty days after the start of

the financial year.

• Failure to present the budget within the specified time frame the responsible Minister

must be held accountable.

• 28(3) should comply to the constitution 305(3) a-e

• 28(4) must relate to the constitution and be more specific.

• 28(5) no recommended

• 29 should relate to 306 of the constitution

• 30 No amendment recommended

• 31 No amendment recommended

GROUP 5

1. The group recommended that section 7(1)(b) includes metropolitan& local

councils as it in in the Constitution, s309(2)(a). Alternatively that should be

reflected in the definition section, i.e to include provincial, metropolitan and

local authorities.

2. The Group agreedwith the principle that accounting officers’ instructions

should be mandatory. Suggestion that the Act could be left like that as the

enabling Act then the mandatory aspect be dealt with in the regulations.

3. Section 7(1) should take cognisance of the Minister’s responsibility regarding

provincial and local government.

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Can the Audit Committee sit at least 4 times a

year, otherwise it will take them longer to work

through the reports. The Audit Committee will

also ensure that compliance is taking place.

According to international standards, they are

supposed to report to the Audit Committee, which

will then have to give the info to the responsible

Ministry.

“the chairman of the AC should not be a civil

servant”…s84. To what extent is that being

practised in the ministries?

That is an administrative issue which needs to be

rectified. So the proposal is good, but the baseline

of having the committees in place is not even

being done.

IOne of the participants cautioned against

The same person they report to is the

one giving the resources. The

Committee will go on to report to the

accounting officer.

Perhaps there need to be copies that

go concurrently to Auditor General,

Audit Committee & Minister.

Currently, there are no Audit

Committees in the, only Min of

Health has one made up of internal

staff.

There is currently a rethink of the

requirement of having a non-civil

servant, to amend the issue of

composition of committee, to bring in

an outsider, to just someone from

outside the ministry being audited but

not necessarily outside the system.

Outsiders will likely want to be paid

at market rates.

This is a critical issue. The charges

for outsourcing the audit work cannot

be compared to paying one outsider.

Moreover, they only sit a few times a

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compromising on matters on public finance

The participant emphasised on the need for

independence and an internal audit. Furthermore it

was highlighted that most problems are centred

around compliance

year. If we are saying government

cannot afford to pay that one person,

does that not lower the standards set

by the Constitution? Is this a good

enough excuse? For audits to be of

any meaningful impact, that element

of independence is critical.

It is important to establish the Audit

Committees with an independent

outsider serving as the Chairman, as

they will promote transparency and

accountability, which is needed for

central government as well as

decentralised structures


-Some participants suggested inserting a clause on

the appointments of the board because it has a lot

of impact on the operations of the entity. It was

indicated that oftenly, an incoming Minister

simply dissolves the sitting board hence there

needs to be a pool of professionals where members

can be pulled from, not just have random people

and also to avoid recycling of people on boards. It

was submitted that sometimes Ministers simply

move around with their people from one Ministry

to another.

This has been embraced under the

Public Sector Governance Act, but

not in the PFMA.

-Under Definitions, s2, should

include commissions, even though

they are public entities, as well as

metropolitan & provincial councils


S36(c) accounting standards require a report on

the previous year's provisions

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On recommendation that s29 should relate to

s306…it refers to a situation whereby the Minister

may by warrant, authorise…. – it has nothing to do

with s306 of the Constitution, it is about repayable

advances. So s29 is unconstitutional because it is

not following the procedures now contained in

s305. So the Minister has to wait for a

supplementary Appropriation Bill otherwise

he/she now has no authority.


-s6 Not decided but it should be mandatory in the

regulations. The detail that is proposed to be

included may be more appropriate in the

regulations, with its mandatory aspect

S7(1)(b) should include metro & local councils

(s309(2)(a), or in the definition of terms

-S7(1) should take cognisance of the Minister’s

responsibility of local government – should make

it clear that the Min also supervises provincial &

local government authorities

3CONSOLIDATION OF SESSION PROCEEDINGS AND WAY FORWARD

Legal Research Officer, CALR & IMT Representative gave a summary of the session

proceedings and reiterated some of the issues which had come out of the deliberations of the

stakeholders. Once consolidated, these inputs would be submitted to the Ministry of Finance

and Economic Development and would inform the Bill Principles to be presented to Cabinet.

Thereafter, IMT would assist the Ministry to conduct a Write Shop where the PFM

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Amendment Bill (or new PFM Bill) would be drafted by legal drafters from the Attorney

General’s office, Legislative Drafting Division. 3

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