Amendment of the Public Finance Management Act [Chapter 22:19] of 2009
In pursuit of making sure that all subsidiary laws are in tandem with the provisions of the Constitution there has been the general consensus that these need to be amended and aligned to the supreme law of the land. One such legislative instrument is the Public Finance Management Act that was promulgated in 2009. Why it needs to be aligned to the Constitution is because the new Constitution was promulgated and gazetted in 2013 and thus upon observation it was noted that the Act has some sections that are in direct contravention with the Constitution or omits some pertinent provisions that speak to the respect of the letter and spirit of the Constitution.
When trying to wrap ones head around the importance of the Public Finance Management Act it is only prudent to start from the fundamental meaning of Public Finance Management. Public Finance Management refers to a set of laws, rules, systems and processes used by sovereign nations to mobilize revenue. This is a system that almost all jurisdictions have because it is allows for the regulation of public finance which is how the money of a particular jurisdiction is used for the benefit of the general populace.
Zimbabwe has been riddled with illicit financial flows and corruption of those entrusted with handling public funds which has exacerbated the bleeding of its finances. This financial bleeding can be stopped when we address the loopholes that allow for such abuse. These loophole are found in the legal framework and Acts passed in Parliament that have left room for abuse hence there is need to amend such lacking Acts. Hence, ensuring that public finances are managed effectively and in a transparent manner. Furthermore, there is need to identify best practises from other jurisdictions that Zimbabwe can borrow a leaf from.
There are six guiding principles enshrined in Section 298 (1) of the Constitution which influence the manner in which the Public Finance Act should look like. These principles include
- Transparency and accountability in financial matters
- Equitable sharing of burdens and benefits between present and future generations
- Finances should be directed towards national development
- Clear fiscal reporting
- Public funds must be expended transparently, prudently, economically and effectively
- Transparency in public borrowing and national debt transactions.
With the above guiding principles it has been noted that the Act falls short as it only takes into consideration the principle that speaks to transparency and accountability in financial matters.
Thus, these shall be the following recommendations on the gaps in the Act that need to be attended to forthwith.
Firstly in the definitions section in Section 2 of the Public Finance Management Act there is no definition of surcharge. This anomaly means that one would interpret the meaning of the word using their different field of work as surcharge would mean different things to different people.
Secondly, there is need to amend the Act to incorporate the principles relating to public finance as it would appear as though the Act only focuses on Transparency and Accountability as a stand-alone and ignores the remaining five guiding principles.
Thirdly, there is need to align the Act to the Constitution and other relevant international obligations Zimbabwe has undertaken by signing international instruments.
Fourthly, Zimbabwe needs to come up with its own GAP (General Accounting Principles) like other jurisdictions as a starting point that will give universal skeleton on how issues of finance should be conducted. This is important.
In addition, there is need for cross referencing of the Act with the Procurement Act, Public Debt Management Act and other relevant statutes.
On the issue of Parliamentary oversight of state revenues and expenditure in Section 4 of the Act, it neglects to include provisions for provincial and metropolitan councils as well as local authorities which is not in tandem with the Constitution. Constitution clearly stipulates in Section 299(1) an inclusion of provincial, metropolitan councils and local authorities.
The Act fails to make provision for the duty of Parliament to make equitable allocation of capital grants between provincial and local tiers of government. Furthermore there is need to amend the Act and incorporate the 5 %quota to be allocated from the national revenue to provincial and local tiers of government.
With regards to the safeguarding of public funds and property the Act fails to give a comprehensive definition of public funds and public property. This need to be incorporated in the Act to be in tandem with the definition found in Section 308(1) of the Constitution. Furthermore, the Act should also incorporate a comprehensive provision relating to the obligations of public officers with regards to safeguarding funds and controlling the purpose and amounts spent.
When it comes to the role of the Auditor General there is need to ensure that Section 81 of the Act is amended to include provisions to compel accounting officers and treasury to comply with the orders from the Auditor General. Furthermore, there is need to ensure that they provide responses on measures taken by each Ministry to implement the recommendations of Parliament in relation to the report of the Auditor General of the preceding financial year. This recommendation will be in tandem with Section 309 (2) of the Constitution.
These are some of the recommendations that were tabled to be included in the amendment of the Act which will also be subsequently aligned to the provisions of the supreme law of the land.