Further work is required on the accrual accounting format that is being adopted by the South African government, Minister of Finance Trevor Manuel said on Wednesday.
He was replying to a question from official opposition Democratic Alliance finance spokesperson Ian Davidson, who asked what the reasons were for the delay in the development of his department’s integrated financial management system (IFMS) and when is it anticipated that it will be implemented.
Manuel said the IFMS project represents a further element in the phased implementation of the Public Finance Management Act (PFMA).
The implementation of the PFMA requires a number of fundamental changes in the areas of budget and financial management in government, he said.
“To date, substantial progress has been made with the implementation of these policy reforms. However, certain challenges still remain.
“Further work is ongoing in respect of the format and extent to which accrual accounting will finally be adopted by the government,” he added.
He said in implementing the PFMA, “it was recognised that the business processes in government would need to be reviewed on an ongoing basis”.
The first phase of the IFMS involved the completion of a user-requirements statement (URS), based on the new systems requirements and the development of a Master Systems Plan (MSP) to guide the systems-renewal processes and the development of a systems prospectus for the renewal processes.
On the basis of the work done during phase one, two more phases of the IFMS project were approved by the Cabinet during September 2005. Phase two, which is currently work in progress, needs to be completed in a period of 18 to 24 months.
This will include a review of user requirements. Further policy development work is needed in accrual accounting and budget reform, which will be incorporated into the user requirements. An overall systems engineering plan also had to be finalised.
The final phase, which entails the full rollout of the new integrated solutions, will be completed over five years. — I-Net Bridge