Compare and Contrast the Budget Cycle Between Presidential System and Parliamentary Democracy System

Topics: Internal control, Annual report, Financial statements Pages: 14 (3925 words) Published: August 7, 2012





Since the democratic dispensation in South Africa, government have developed progressive laws that embrace democratic values. These include the Constitution (Act no. 108 of 1996), which entrenches democratic rights and provides a core foundation for the functionality of the South African government. Among other things, the Constitution sets out structures of government, assigns powers and authority of government and spells out the citizens’ rights. Underpinned in the Constitution are the delegation of powers and authority, and the doctrine of the separation of powers among the three spheres of government, namely, Legislature, Executive and Judiciary. These are enhanced by the checks and balances to ensure that no sphere of government abuses its powers. The Constitution further entrenches a culture of accountability in government as well as a degree of transparency in government budgeting and financial management. In addition, national legislative framework has been enhanced to translate these important principles into the budget process. The Public Finance Management Act (PFMA) of 1999 serves as a legislative cornerstone of the management of public funds and sets stringent transparency requirements including regular reporting and the assignment of accountability. In enforcing its oversight responsibility and further clarifying the separation of powers, Parliament recently introduced new budget reforms. Two Acts of Parliament were enacted including the Financial Management of Parliament Act (FMPA). Among the objectives of this Act is to provide for parliamentary oversight of Parliament’s budget and expenditure through an appropriate oversight mechanism of parliament. 1 It also spells out responsibilities of different role players in the budget process and the relationship with other state institutions, including National Treasury and the Auditor-General.


Parliamentary Budget Process

The parliamentary budget process is cyclical, it starts with the planning process and ends with the reporting process. It links the parliamentary programme with the budget cycle. The parliamentary budget process aligns strategic planning, monitoring and reporting with budget planning, monitoring and reporting. Parliament is required to formulate five-year strategic plans and annual performance plans, allocate resources to implement those plans and monitor and report on the results. In all these phases, different role players are assigned responsibilities and the FMPA guides them on the execution of such responsibilities. The planning, budgeting, monitoring and reporting cycle describes the relationship between these processes and emphasises the accountability lines of the budget process. The Act further 1

Financial Management of Parliament Act (2009)
Author Contact Details: 021 403 8201

Research Unit | Author Name: Sizwe Nyenyiso


encourages transparency during the process and consultation with the Minister of Finance in some aspects of budgeting is required. Section 17 of the FMPA requires that the Executive Authority must consult the Minister of Finance in determining the processes of submitting Parliament’s budgets to the National Treasury before these budgets are submitted to the National Treasury.2 Strategic and Operation plan Strategic planning assists institutions in establishing longer term priorities. It assists in defining an organisation’s strategy and direction, and in making decisions about the allocation of resources. In contrast, the operational plan defines short-term methods of achieving strategic objectives. The strategic plan indicates outputs to be produced and specifies performance indicators, while the operational plan sets performance targets. 3 The FMPA requires the Accounting Officer to prepare and present to the Executive Authority a draft...
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