Internal Controls Critical for Public Financial Management

“Internal controls are critical for the safeguarding of public money” said the Hon. Gavin Woods, Member of Parliament, National Assembly of South Africa. Mr. Woods presented a ‘Financial Management Reform Model’ at the ICGFM conference in Miami. The reform model for government consists of three stages:

1. Planning reforms includes policy objectives, strategic planning, Medium Term Expenditure Frameworks (MTEF) and the the annual performance budget
2. Operational and management reforms includes procurement, personnel management assess, working capital and internal controls
3. Accountability and oversight reforms include oversight by the Supreme Audit Committee (SAI) and the Public Accounts Committee (PAC)

Performance management requires audit to ensure that the government has achieved the best value for money. Mr. Woods is seeing a switch from compliance "with every single rule" to performance in South Africa. Corruption can be reduced through information availability, variance analysis, corporate performance culture, limited computer fraud, audits, GAAP disclosure requirements and better means of investigation. This provides a "paper trail" for accountability. Criminal sanctions in South Africa address financial malfeasance.