The impact of Public Finance Management Act in advancing the organisational objectives of the North-West Department of Education

Abstract

The Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999) (as amended by Act No. 29 of 1999) is one of the most significant pieces of legislation passed by the democratic government of South Africa. The Act promotes good financial management in order to maximise service delivery through effective and efficient use of limited resources. The purpose of this study is to establish the impact of the Public Finance Management Act on advancing the organisational objectives of the North-West Department of Education. The Public Finance Management Act (PFMA), Act 1 of 1999 emphasises that the executive authorities must ensure that government institutions comply with this Act and the financial policies it prescribe. However, since the adoption of the PFMA, there are challenges of compliance with the Act by public institutions and government departments. In order to determine the impact of the PFMA on advancing the organisational objectives of the North-West Department of Education, a questionnaire was designed and administered amongst a hundred and ten employees of the North-West Department of Education and Sport Development at its Financial Management Services Directorate (head office). The study revealed that finance policies and practices have a positive impact on advancing organisational objectives and that the finance policies and practices provide direction for the department to reach its goals. However, the PFMA is not yet implemented effectively. This study recommends that the PFMA must be fully complied with and the organisation‟s objectives must be aligned to the PFMA in order to improve the attainment of departmental goals.