Hon Chairperson, on 22 March 2012, the Constitutional Court, in Premier: Limpopo Province v the Speaker of the Limpopo Provincial Legislature and Others, found that the Constitution of the Republic of South Africa of 1996 does not authorise provincial legislatures to pass their own financial management legislation.
Consequently, the court found the various provincial statutes purporting to deal with the financial management of various provincial legislatures unconstitutional and invalid.
Parliament, which enjoys plenary legislative authority, may assign such power to the provincial legislatures to pass national legislation to deal with the financial management of the provincial legislatures.
The parties to this matter were required by order of the court to file a report with the court by 9 September 2013, on what steps have been taken to remedy the defect. Subsequently, the Constitutional Court ordered that the parties report on the implementation of legislation by 10 March 2014.
On 20 September 2012, the National Assembly referred the Financial Management of Parliament Act of 2009 to the Standing Committee on Finance to review the Act with a view to introducing amending legislation if necessary. The resolution noted technical challenges with implementation of certain provisions of the Act and instructed the standing committee to evaluate the application of the Act, including the application of those provisions relating to authority of provinces to enact similar legislation and timeframes associated with various reporting mechanisms.
It was subsequently decided by the Speaker's Forum that the financial management of provincial legislatures will be provided for in an amendment to the Financial Management of Parliament Act instead of assigning such legislative competence to the provincial legislatures.
The objectives of the Bill are as follows: to include the new section to make the Act applicable to provincial legislatures and the section relating to the oversight mechanism; transfer the duty to submit audited financial statements to the accounting officer instead of the executive authority in order to streamline the existing practice; insert provisions to clarify the procedure for dealing with Parliament's adjustment budget in respect of its own funds; amend the sections relating to the tabling of the annual report by the executive authority; and align the sections relating to the auditing of the annual financial statements and submission of the annual report to the Public Financial Management Act of 1999.
Further amendments were added by the Select Committee on Finance, as agreed to, and I refer to clause 13, which is on page 7, from line 13, to delete paragraphs (a) and (b) and to insert the following new paragraphs:
a) the substitution for paragraph (b) of subsection (4) of the following paragraph:
b) in the instance of
-and that is a new word -
a) a modified audit opinion in respect of such funding, until adequate measures are put in place to rectify the issues giving rise to the modified audit opinion; and
b) the insertion after subsection (4) of the following subsection: (4A) For the purpose of this section, modified audit opinion includes a qualified opinion, an adverse opinion and a disclaimer of opinion.
The Western Cape province voted against the Bill. They did not support it and their objections were tabled and included in the minutes.
We call on the House to support the amending Bill. Thank you.
Debate concluded.
Question put: That the Bill be agreed to.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West.
AGAINST: Western Cape.
Bill accordingly agreed to in accordance with section 65 of the Constitution.