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Public Entity CFO Forum: Retention of Surpluses

Join Moipone Ramoipone from the Office of the Accountant-General as she presents on the legislative requirements for the retention of surpluses by public entities, in compliance with the Public Finance Management Act (PFMA) section 53(1) and 53(3). Learn about the process to be followed by accounting authorities and the revised Treasury instruction to be issued. Don't miss this important forum hosted by the National Treasury.

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Public Entity CFO Forum: Retention of Surpluses

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  1. PUBLIC ENTITY CFO FORUM RETENTION OF SURPLUSES OFFICE OF THE ACCOUNTANT-GENERAL Presenter: Moipone Ramoipone| National Treasury | 07 March 2017

  2. LEGISLATIVE REQUIREMENTS • Section 53(1) of the PFMA– Accounting authority for a public entity listed in schedule 3A and 3C to the PFMA must submit a budget of estimated revenue and expenditure for that financial year for approval by the executive authority responsible for that public entity. • Section 53(3) of the PFMA – Public entities listed in schedule 3A and 3C to the PFMA may not budget for a deficit and may not accumulate surpluses unless the prior written approval of the National Treasury has been obtained.

  3. BACKGROUND • National Treasury Instruction no.3 of 2015/2016 was published on 12 August 2015. • The aim of this Treasury Instruction is amongst others to: • prescribe measures for public entities listed in schedule 3A and 3C to the PFMA to declare surpluses; • enforce the provisions of section 53(3) of the PFMA; and • prescribe for public entities listed in schedule 3A and 3C to the PFMA to surrender into the relevant Revenue Fund, all surpluses that were realized in a particular financial year.

  4. PROCESS TO BE FOLLOWEDBY ACCOUNTING AUTHORITIES 31 July 30 Sep 31 May 31 Aug 31 March Adjustments 2nd Request if AFS were adjusted Year End Declaration of deficits/ surplus: and Request to retain surplus from the previous year Surrender surplus if approval to retain was not granted by the relevant Treasury No surplus, declare “Nil” return Audit report

  5. CURRENT CALCULATION OF A SURPLUS

  6. REVISED CALCULATION OF SURPLUSES

  7. REVISED TREASURY INSTRUCTION TO BE ISSUED • Challenges with the current instructions are notes; • Comments received on the revised instruction will be incorporated in the instruction; • Partnered with the ASB to assist with the revision of the instruction; • The current instruction will be repealed and the new instruction will take effect from 01 April 2017

  8. THE END Moipone Ramoipone Office of the Accountant-General Governance Monitoring and Compliance 012 315 5284 Moipone.Ramoipone@treasury.gov.za

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