Skills development for non-core financial managers in the North West Provincial Departments - a financial management perspective and an imperative for service delivery improvement

SKILLS DEVELOPMENT FOR NON-CORE FINANCIAL MANAGERS IN THE NORTH WEST PROVINCIAL DEPARTMENTS - A FINANCIAL MANAGEMENT

PERSPECTIVE AND AN IMPERATIVE FOR SERVICE DELIVERY IMPROVEMENT

By

PETER THELELE

Mini-dissertation submitted in partial fulfilment of the requirements for the degree of Masters in Business Administration at the Mafikeng Campus of the North-West University

Supervisor: Professor WPJ van Rensburg Language Editor: Professor Annette L. Combrink

November 2013 F LIBRARY MAFI(ENG CAMPUS Call No.:

204 -Ji- 23

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0600436140 North-West University Mafikeng Campus Library

DECLARATION

I declare that the mini-dissertation for the degree of Masters in Business

Administration at the North-West University hereby submitted, has not been

submitted by me for a degree at this or any other university, that it is my

own work in design and execution and that all material used herein has

been duly acknowledged.

Peter Thelele

November 2013

ACKNOWLEDGEMENTS

I would like to acknowledge all the people who have been very helpful throughout my study for the MBA programme. My special thanks go to my supervisor; Professor WPJ van Rensburg, who encouraged me to enroll for this degree. His encouragement and mentorship throughout my research project ensured that I maintained analytical thinking, honesty, and remained focused on my work.

I am also indebted to Professor Annette Combrink, who did a wonderful work of editing this research document. Her professional advice and suggestions has resulted in making this research study of the highest quality.

My special thanks are also extended to my former colleagues at North West Provincial Treasury, and more especially Zahira Swartz who, as my secretary and personal assistant, made tremendous contributions in the administration and distribution of the research questionnaire.

My father, James, and father-in-law, Benjamin who have all passed on, remain in my memories as the greatest inspiration and motivation in my life. I cannot forget special prayers from my mother (Rosie), and my mother-in-law (Fenge). They have both been pillars of strength to my family.

Finally, I would like to thank my family, especially my wife and lifetime partner (Rose) together with our two sons (Karabo and Mpho) for the sacrifices they made to make it possible for me to complete this project. It was a challenging journey for me, in terms of my sacrificing their precious time to be with them as a husband and father. This achievement is truly a dedication to them.

ABSTRACT

The primary problem

The primary research problem revolves around lack of basic financial management skills (e.g. financial management, project management, strategic management, computer literacy, supply chain management, risk management, compliance with legislation and various regulations) among the non-core financial managers in the North West Provincial departments. These managers have been entrusted with the responsibility to manage public funds, and subsequently deliver services in terms of their departmental strategic objectives. These strategic objectives are linked to national and provincial departmental service delivery mandates, in line with government priorities. Non-core financial managers are involved in major operational activities of government, and are also the producers of crucial government information and reports, and therefore they need basic financial knowledge or skills, coupled with soft skills (motivation, time, conflict and stress management, etc.) to be able to respond to the basic questions raised by the report users.

In the case of the North West Provincial Government, the main purpose of the research was to investigate basic financial management skills levels of non-core financial managers, the impact thereof on service delivery, and to develop strategies to address the shortcomings identified.

Research methodology

A questionnaire was used to collect data from non-core financial managers at post levels 9 to 12 within various departments in the North West Provincial Government, using the PERSAL salary administration system as the source of information. A number of interviews were also conducted with various management officials from the North West provincial departments, within different functional areas, including human resource development managers. The individuals interviewed also included seniors managers.

The outcomes of the study

The results of this research have provided more evidence that the majority of non-core financial managers do not have the requisite basic financial management skills to be able to manage public funds. What is of critical importance is that basic financial management skills cut across these managers' day-to-day operational activities, hence the importance of developing these officials in this discipline of financial management.

The implication of the findings of this study is quite clear that the North West Provincial Government will find it difficult to achieve its service delivery mandates, given the huge challenge it has in terms of shortcomings in financial management skills for the non-core financial managers. Structured financial skills development interventions, in conjunction with proper implementation of the Performance Management Development System, should be put in place in order to address the identified problem of critical financial management skills shortages.

TABLE OF CONTENTS

CHAPTER 1: ORIENTATION

1.1 _{Introduction...1}

1.2 Background to the study...1

1.3 Research problem...5

1.4 Research objectives...6

1.5 _{The importance of the research...8}

1.6 _{Scope and limitation of the research...9}

1.7 _{Significance of the study...10}

1.8 Structure of the research study...12

CHAPTER 2: LITERATURE REVIEW AND THEORETICAL FOUNDATION 2.1 _{Introduction ... ... .. ... . ... .. ... . ... ... 14}

2.2 Review of public financial management reforms ... 16

2.3 South African Government's reform initiatives in public financial management... 27

2.4 _{Government strategic objectives and service delivery improvement} plans... 45

2.5 _{The South African Government's skills development initiatives... 50}

2.6 Financial skills development initiatives in the North West provincial Government... 71

2.7 Financial management in the public sector

-

a theoretical foundation... 93

2.8 _{Conclusion... 101}

CHAPTER 3: DEFINING THE PROBLEM AND RESEARCH QUESTIONS 3.1 Introduction...102

3.2 Rationale to the problem...103

3.3 _{Defining the problem and research questions...105}

3.4 _{Conclusion...107}

CHAPTER 4: RESEARCH DESIGN AND DATA ANALYSIS 4.1 _{Introduction...108}

4.2 Research methodology ... 109

4.3 Data analysis...123

4.4 _{Conclusion...123}

1

CHAPTER 5: RESEARCH RESULTS AND INTERPRETATION

5.1 Introduction... 124

5.2 _{Response rate of the survey... 125}

5.3 Quantitative analysis: Results of the questionnaire... 130

5.4 Results and interpretation of findings... 130

5.5 _{Conclusion... 170}

CHAPTER 6: DISCUSSIONS, CONCLUSIONS, IMPLICATIONS AND RECOMMENDATIONS 6.1 _{Introduction... 171}

6.2 _{Discussion of the results... 171}

6.3 _{Research questions on the primary problem... 172}

6.4 Concluding remarks... 176

6.5 Implications... 177

6.6 Recommendations... 177

6.7 Limitations of the research... 178

BIBLIOGRAPHY... 179

LIST OF FIGURES

FIGURE DESCRIPTION _PAGE

2.1 North West Provincial Departments' Audit Outcomes —2007 to 2010 ₃₄ 2.2 Financial Management Capability Maturity Model

-

North West

Provincial Summary (2010/2011) 39

2.3 Comparisons

-

_{North West Financial Management Capability}

Maturity Models (2008/09

&

2010/11) 40 2.4 The overall provincial areas of HR challenges ₅₈ 2.5 Provincial internal environmental trends 59 2.6 Percentage of E&I Cluster departments with common HR challenges 60 2.7 Percentage of G&A departments with common HR challenges 60

2.8 Provincial critical skills trends ₆₁

2.9 Percentage of North West departments with common HR challenges 62

2.10 North West critical skills ₆₃

2.11 Provincial age profile ₆₄

2.12. NWPG

-

Percentage of total employees (excluding MECs 75 2.13 Percentages of Total NWPG Management Staff 78 2.14 FMT (Phase 2) Learner Responses

-

Applicability of Training 88 2.15 FMT (Phase 2) Learner Responses: Impact of Training on

Performance 90

4.1 Data Analysis Feature on Microsoft Excel ₁₁₇

4.2 Sampling Function on Microsoft Excel 118

5.1 Questionnaire

-

Percentage distribution (non— core financial

managers) 127

5.2 Percentage Participation of supervisor per department ₁₂₈ 5.3 Percentage Participation of human resource managers 129

LIST OF FIGURES

FIGURE DESCRIPTION _PAGE

5.4 _{Percentage of gender profiles (non— core financial managers 131} 5.5 Percentage Position of non— core financial manager in provincial

departments 132

5.6 Percentage Participation of respondents per department ₁₃₃ 5.7 _{Percentage of education qualifications completed 134} 5.8 Percentage education qualification

-

_{specialised field of study 135} 5.9 Percentage qualification with finance

-

related courses ₁₃₆ 5.10 Percentage of performance evaluation results ₁₃₇ 5.11 Performance evaluations

-

financial skills gaps identified ₁₃₉ 5.12 Performance evaluations

-

_{percentage average of financial skills gaps 139} 5.13 _{Percentage— structured financial management training programmes 141} 5.14 _{Percentage actual training linked to personal development plans 142} 5.15 _{Percentage attendance of financial management skills training 144} 5.16 _{Financial management skills training for day— to-day functions 145} 5.17 _{Responses on recommended courses for improving financial}

management skills 147

5.18

Percentage average responses on recommended courses for

Financial management skills improvement ₁₄₈ 5.19 Percentage

-

gender of respondent (supervisors) ₁₅₂ 5.20 _{Percentage representation of respondents' positions in departments 153} 5.21 _{Percentage response on structured financial management training}

_-

LIST OF FIGURES

FIGURE DESCRIPTION _PAGE

5.22 Percentage response on actual training linked to personal

development plans 156

5.23 Percentage responses on attendance of financial management skills ₁₅₈ _______ Training

5.24 _{Percentage response on the importance of basic financial}

159 management skills for performance and service delivery improvement

5.25 _{Responses on recommended courses for improvement of financial}

management skills 160

5.26 Percentage average response on recommended Courses for

improvement of financial management skills 161 5.27 Percentage

-

Gender of respondents (HR managers) ₁₆₄ 5.28 Percentage

-

respondents' position in the department ₁₆₅ 5.29 _{Percentage of departments having structured financial management 167}

LIST OF TABLES

rTABLE DESCRIPTION _PAGE

2.1 Summary of North West provincial departments audit

outcomes (31St March 2010) 32

2.2 The breakdown of North West provincial audit outcomes

(31st March 2010) 33

2.3 _{Comparative analysis of NWPG audit outcomes (2004-2010) 33}

2.4 Batho - Pele principles ₄₃

2.5 2.6

NWPG

-

Details of total employees (including MECS) NWPG - Details of total employees (excluding MECS)

74 74 2.7 NWPG

-

Summary of total employees (excluding MECS) ₇₄ 2.8 _{Middle Management Services (MMS) as at 31st August 2011) 76} 2.9

2.10

Details of total staff in Financial Management Services (CFO units)

-

31 August 2011

NWPG

-

Summary of total management staff (31 August 2011)

77

78 2.11 Financial Management Training (Phase 2)

-

_{Facilitation Days}

_&

Months 82

2.12 Financial Management Training (Phase 2)

-

Participation of

learners per Department 83

2.13 Financial management training (phase 2) results

-

_Successful

learners (module and department) 85

2.14 _{FMT (phase 2) Learner response on applicability of training 87} 2.15 FMT (phase 2) learner responses

-

Impact of training on

Performance 89

4.1 _{NWPG middle management employees as at 20111031 112} 4.2 _{Summary of NWPG middle management employees as}

at 20111031 113

LIST OF TABLES

TABLE DESCRIPTION _PAGE

4.3 Summary of none core financial manages in NWPG Departments as at 20111031

113

4.4 Sample of employees per Department

-

Adjusted Health (Nurses) and education departments (educators)

114

4.5 Sample of employees per Department

-

5 percent of total adjusted

population 116

5.1 The names of non- core financial managers' departments ₁₂₆ 5.2 Questionnaire distribution

-

none core financial managers 126 5.3 Total Supervisor Participation per department ₁₂₈

5.4 Supervisors' responses received ₁₂₈

5.5 Questionnaires distribution

-

human resource managers 129 5.6 Gender profile of respondents

-

non-core financial managers 131 5.7 _{Position of non-core financial managers in provincial departments 132}

5.8 Name of respondents' department ₁₃₃

5.9 Educational qualifications of respondents 134 5.10 Educational Qualifications

- Specialised field of study

₁₃₅ 5.11 Qualifications with financial

-

related courses 136

5.12 Performance evaluation results ₁₃₇

5.13 Performance evaluation

-

financial skills gaps 138 5.14 Performance evaluation

-

average financial skills gaps 139 5.15 Structured Financial Management training ₁₄₀ 5.16 Actual training linked to personal development plans 142 5.17 _{Attendance of financial management skills training 144} 5.18 Financial management skills for day-to-day functions 145

LIST OF TABLES

TABLE DESCRIPTION _PAGE

5.19 Recommended courses for improving financial management skills ₁₄₆ 5.20 Average responses on recommended courses for financial

management skills improvement 147

5.21 Gender of respondent (supervisors) ₁₅₁

5.22 Position of respondent in the department ₁₅₂ 5.23 Structured financial management training programmes ₁₅₃ 5.24 _{Subordinates' actual training linked to personal development}

Plans 156

5.25 _{Attendance of financial management skills training 158} 5.26 Importance of basic financial management skill for performance

and service deliver improvement 158

5.27 _{Response on recommended courses for improvement of financial}

management skills 160

5.28 Average response on recommended courses for improvement of

financial management skills 161

5.29 Gender of respondent (HR managers) ₁₆₄

5.30 Position of respondent in the department ₁₆₄

5.31 _{Name of the respondents' department 166}

5.32 _{Structured financial management training programmes in departments 166} 5.33 PALAMA

-

Management Development Programme Courses ₁₆₈

CHAPTER 1

ORIENTATION

1.1 INTRODUCTION

The focus of this research is on the North West Provincial Government's dilemma or problem that revolves around lack of financial management skills within non-core financial managers, and the impact thereof on service delivery.

The content of the chapter includes

the background to the study, the research problem,

aims and objectives of the study,

assumptions of and justification for the study, significance and importance of the investigation, scope and limitation of the study, and

a chapter outline of the research report.

1.2 BACKGROUND TO THE STUDY

The Department of Public Service and Administration (DPSA) undertook research to review the first Human Resource Development Strategy for the Public Service that was prepared and launched in April 2002, with the theme Skills Development for

Transformation and Service Delivery 2002-2006.

The entire exercise was aimed at aligning the Human Resource Development Strategy with new skills challenges that the Public Sector was facing given the urgency of Government's developmental agenda as reflected in the Accelerated Shared Growth Initiative for South Africa (ASGISA), Joint Initiative for Priority Skills Acquisition (JIPSA), and also in other numerous Provincial Growth and Development initiatives.

The Accelerated Shared Growth Initiative for South Africa (ASG ISA) is a national growth initiative to be shared by all stakeholders involved in economic activities (government, labour, and the business community), aimed at addressing government's core objectives as set out in 2004, to halve poverty and unemployment by the year 2014. This initiative depended on an improvement in the performance and job creating capacity of the economy. That meant the South African economy had to sustain certain levels of economic growth (e.g. between 3 and 5 pe rcent) annually, to be able to create job opportunities, and thereby reduce unemployment and poverty among its people. The shortages of skilled professionals, managers, artisans, and poor quality of education have been identified as constraints or impediments towards achieving this objective. Financial management is one those rare skills that are included, especially in managers and professionals.

The Joint Initiative for Priority Skills Acquisition (JIPSA) is a spin-off or a

by-product of ASGISA, which was established as a structure or a national initiative, led by a committee of key cabinet ministers, business leaders, trade unions, education and training providers or experts, to identify urgent skills needs and quick and effective solutions thereof. JPSA has been established to develop strategies for fast-tracking skills delivery in the identified priority areas, and also eliminate any obstacles and challenges so as to support ASGISA's objectives of accelerating economic growth, and halving poverty and unemployment by 2014.

Public service employment figures according to Statistics SA: Survey of Employment

and Earnings (Statistical Release P0275) of June 2009 indicated that there were

1,170,892 employees that represented 9 per cent of total employment (13,369,000) in the Republic of South Africa. This translates into Government being the major employer in many jurisdictions, and thereby having a major impact on the country's economy.

The biggest challenge for Government is getting the right skills, for it to be viable in its businesses, and leading to it competing with the Private Sector in occupations where skills are rare. One of those rare skills is financial management.

Dr lraj Abedian of Pan African Capital Holdings wrote an article with a title Building

financial managerial competence in support of service delivery in DPSA's publication:

Service Delivery Review (.6[2], 2007), stating that financial management is central to good public service delivery, and that the two aspects are inseparable. The emphasis of his statement is also on the challenges that Government (both National and Provincial) is facing, since the introduction of the Public Finance Management Act (PFMA), which calls for financial management skills in the public sector.

He also went on to say that there are some systematic issues that the Department of Finance, Department of Public Service and Administration (DPSA) and National Treasury just simply ignored when the Public Service Act and the PFMA were introduced. These issues revolve around the different mix of skills required - "soft" and "hard" skills. Financial management is all about "hard" skills. Line managers in the public sector, especially those who fall within the middle management levels in various provincial departments, need to have these skills to be able to effect service delivery. It is unfortunate that a large percentage of managers in the public sector do not have financial managerial skills.

The Department of Public Service and Administration (DPSA), in its revised Human Resources Development Strategy (HRDS) document: The Strategic Framework - Vision 2015, identified the following five dimensions of skills challenges in the Public Sector, that have a major impact on the acquisition (recruitment), development and maintenance (retention) of skills in the Public Service:

The effect of history. The Apartheid education system denied the majority of

people in South Africa training and development opportunities before the democratic elections of 1994. Not much was done by our tertiary institutions to make curriculum changes to meet the needs of the changing public sector. The curriculum areas concerned include commerce (financial management included), mathematics, science and technology.

While Government is expanding its operations by increasing its service delivery initiatives, the need for more qualified people and the availability of skills in the right areas has become problematic. Financial management is one of those skills that are rare to find, and others include project management, information and communications technology, engineering sciences, etc.

The changing nature of Government. _{The introduction of various policy}

frameworks, improved accountability and governance requirements has resulted in the redesign and expansion of organisational structures of both National and Provincial Governments, to enhance service delivery. These developments have led to specialisation in Government, which put more challenges on the recruitment, use and retention of the required skills.

One of the major problems identified is that recruitment needs are not clearly defined, to ensure that appropriate appointments are being made, and this results in wrong placement of employees or managers in wrong positions, and thereby having a negative impact on productivity and service delivery.

The supply pipeline. This factor affects the officials or managers as targeted in

this research. They represent that sector of labour that is always mobile. The private sector is also competing with government in recruiting better skilled employees due to their favourable remuneration packages plus attractive benefits. The North West Provincial Government is also affected in this regard, in particular its Departmental Head Offices that are based in Mafikeng, and also far from the major cities. Other problems include the unavailability of accommodation facilities, which is a deterrent to prospective job seekers.

Developing and managing people. The emphasis here is on Management

Leadership on the side of Senior Management Services. Poor quality of leadership does affect productivity. This is reflected in the manner in which the senior managers manage the Performance Management Development System (PMDS), especially in regard to employees' Personal Development Plans.

Training and development are in most instances found not to be linked to employees' performance management development systems (PMDS). Personal development plans, based on skills and training needs identified in each employee's performance appraisals, are not being implemented.

Employees are left to attend training courses, workshops and seminars that are not in line with their personal training and development plans.

The introduction of the Sector Education and Training Authorities (SETAs), in particular the PSETA, has been a total failure in the past in terms of providing relevant skills development programmes to meet the public service 's Financial Management skills' shortage. This is one of the areas that are receiving attention under JIPSA initiatives, where SETA Skills Plans are being aligned to JIPSA and ASG ISA objectives.

The Impact of HIV and AIDS. The situation here is the impact of HIV and AIDS in terms of higher attrition of talent and scarce skills through deaths, and the phenomenal increase of sick leave days that impact negatively on productivity. The Human Resource Development Strategy has not responded positively to the effects of HIV and AIDS, with regards to the replacement of those skills that have been lost. Financial Management, being one of the rare skills, poses a major challenge to the Public Sector, in particular the North West Provincial Government. One of the biggest shortcomings of Government is the fragmentation with respect of the management of HIV and AIDS.

1.3 RESEARCH PROBLEM

The primary research problem revolves around lack of basic financial management skills (e.g. financial management, project management, strategic management, computer literacy, supply chain management, risk management, compliance with legislation and various regulations) among the non-core financial managers in the North West Provincial departments. These managers have been entrusted with the responsibility to deliver services in terms of their departmental strategic objectives.

These strategic objectives are linked to national and provincial departments' service delivery mandates, in line with government priorities. This aspect of "lack of financial skills" is very rife in those managers who fall outside the scope of the finance divisions of departments.

In the case of the North West Provincial Government, the main purpose of the research has been to determine the relevance and importance of training and skills development in financial management, to non-core financial managers in provincial departments, and the impact thereof on service delivery.

The problem of lack of financial management skills calls for the need for training and development in this discipline and other related courses, which are aimed at building the capacity of employees to enable them to perform their specific tasks within the context of the set specified standards (i.e. in terms of policies, procedures or operational manuals). These will enable the departments to achieve their objectives.

The rationale of the problem and research questions will be comprehensively discussed in Chapter 3.

1.4 _{RESEARCH OBJECTIVES}

This section will address the purpose of the investigation or research. In a descriptive study (like this one), the objectives can be stated as the research question - business problem or research question translated into research objective (Zikmund, 2000:94). The research objectives are the writer's (researcher's) version of the business problem statement.

Management in the North West Provincial Departments and the writer (researcher) expect problem-solving efforts to result in statements of research questions and research objectives. The objectives explain the purpose of the research in measurable terms, and define standards of what the research should accomplish.

In the case of the North West Provincial Government, the main objectives of the research have been to determine the extent of the lack of financial skills within the non-core financial managers, the relevance and importance of financial management skills training and the impact thereof towards service delivery improvement in provincial departments.

1.4.1 Research aim

The general aim of the study is to investigate the extent of the lack of basic financial management skills and qualification profiles of non-core financial managers in the North West provincial departments, their impact on service delivery, and the development of strategies to address the shortcomings identified with the ultimate aim of improving service delivery.

1.4.2 Specific objectives of the study

The objectives of the study determined during the early stages of the research were included in the design to ensure that the information collected is appropriate for solving the problem identified.

The specific objectives of the study were to:

1.4.2.1 _{Identify whether the North West Provincial Departments have financial} management training programme interventions for their non-core financial managers and their effectiveness in terms of improvement on the managers' skills, performance and service delivery.

1.4.2.2 _{Establish a linkage between the North West Provincial Government's} departments' skills development interventions and the non-core financial managers' Performance Management Development Systems (PMDS), in terms of the managers' personal development plans.

1.4.2.3 _{Determine which are the basic skills competencies that are required for} non-core financial managers to perform in their respective functional areas.

1.4.2.4 _{Establish and determine what the current qualifications and skills profiles} are of the existing staff complement within the targeted population (SL9 - SL12) of non-core financial managers in the North West Provincial Government's departments.

1.4.2.5 _{Identify the basic financial management skills and competency gaps within} the targeted group - i.e. non-core financial managers within the North West Provincial Government's (NWPG) departments,

1.4.2.6 _{Establish which are the recommended financial management training} courses/modules or programmes for the key financial skills gaps identified in non-core financial managers, within the North West Provincial Government's Departments.

1.5 THE IMPORTANCE OF THE RESEARCH

This study should benefit the North West Provincial Government, in particular the various departments, in assessing the relevance and effectiveness of their skills development initiatives and programmes for non-core financial managers.

The study should further enable the departments to examine whether there have been positive changes in the actual performance of non-core financial managers, and subsequent improvements on service delivery, after implementation of financial management training and development programmes.

All departmental heads, Accountants General, Senior Managers, Provincial and National Governments and other stakeholders, will be interested in the outcome of the study - and be able to assess the situation before and after the study.

The study will also provide both the National and North West Provincial Treasuries mechanisms through which they could assist other departments, with regards to capacity building initiatives.

1.6 SCOPE AND LIMITATIONS OF THE STUDY

1.6.1 Scope of the study

The scope of the study or research centred on the non-core financial managers in the North West Provincial Government's departments. These managers are officials who are more operational in terms of their functions. The majority of them are office-based, while others' jobs are project-oriented, as is the case with departments such as Agriculture, Health, Transport and Public Works. The Department of Education has managers who have been employed as educators and principals of schools. They have post levels that are equivalent to other office-based staff such as Chief Education Specialists, and those on salary levels 9 to 12.

1.6.2 Limitations of the study

The study was restricted to the non-core financial managers within the post grading or salary level of 9 to 12, or equivalent in the Department of Education, in the North West Provincial Government's departments. These managers are categorised as Middle Managers Services (MMS).

The Department of Education has office and school-based managers (educators). School-based managers have been excluded in this study.

For the Department of Health, professional nurses have also been excluded from this research.

1.7 SIGNIFICANCE OF THE STUDY

This section contains the justification for undertaking the research. In this section the writer describes the benefits that will accrue from the (research) study. The importance of doing the study "now" is emphasized. This section required the researcher to understand what the most troubling area is for the North West Provincial Government.

The North West Provincial Government (in particular departments) must be convinced that the proposal (plan), resulting from the research will meet its needs - by this is meant developing the financial skills of non-core financial managers, and thereby improve the achievement of efficient and effective service delivery.

The study must also assist the North West Provincial Government departments in addressing the following challenges, which were echoed by Professor Richard M. Levin: Director General, Department of Public Service and Administration (at the Senior Management Conference in 2006):

Lack of relevant skills for the post in which one is an incumbent (for example, a manager with a professional degree but in a largely administrative job, with no or limited links with their professional skills and competence). This reflects a problem of an absence of a professional service, which forces professionals to become managers in order to secure career progression. In many cases professionals are lost, but poor managers gained.

Lack of skills to recruit and select proper personnel.

Lack of proper training and development to enhance performance. Once the manager is in the position often they do not undertake training to further sharpen their skills.

Non-compliance with policy, non-adherence to Performance Agreements, and proper utilization of performance management tools to enhance performance of employees in the workplace.

A study of this nature is required to examine whether there are positive changes on the performance of non-core financial managers, and improvements in terms of service delivery initiatives by various provincial departments, after implementation of financial management training and development.

All Accounting Officers of departments (or departmental heads), Accountants General, Senior Managers, Provincial and National Governments and other stakeholders, will be interested in the outcome of the study - and be able to assess the situation before and after the study.

The study will also provide both National and North West Provincial Treasuries with mechanisms through which they could assist other departments, with regards to capacity-building initiatives.

The study is significant as the results are expected to:

1.7.1 Assist the North West Provincial Government (NWPG), and its departments, in providing relevant skills training and development programmes for non-core financial managers, and thereby improving their performance and service delivery initiatives to its citizens.

1.7.2 Ensure that training and development interventions are better targeted, and training budgets are used optimally.

1 .7.2 Assist the NWPG departments in the recruitment and placement of qualified and skilled managers in the right jobs.

1 .7.3 Assist the NWPG in instilling a culture of compliance with policy and legislative prescripts, adherence to Performance Agreements, and proper utilization of performance management tools to enhance performance in the workplace.

1.8 STRUCTURE OF THE RESEARCH STUDY

This dissertation comprises six chapters. These

are:-Chapter 1: Orientation

The chapter consists of introduction and background to the study, statement of the problem, research aims and objectives, scope and limitations (delineation) of study, significance and importance of the study as well as the study environment.

Chapter 2: Literature review and theoretical foundation

in this chapter it will be indicated what has already been done in the field of study, of financial management in the public service. This chapter also includes the theoretical framework or foundation that has informed the study. All relevant studies are analysed and evaluated, and shortcomings also indicated. It is in this chapter that important aspects of the literature reviewed are summarised and interpreted in terms of the problem statement.

Chapter 3: Defining the problem and research questions

This chapter presents the heart of the research process, with the aim of convincing the reader, and in particular the North West Provincial Government's management, to continue reading the proposal.

The researcher or writer attempts to capture the reader's attention by stating

a) The management dilemma or problem;

Its (dilemma) background and rationale, indicating what the general aims of the study are, and giving reasons for studying this particular phenomenon - lack of financial management in the public service;

Its consequences; and

The resulting management question

Chapter 4: Research design and analysis

Chapter 4 presents the research design and methodology used in the study. It covers justification for the concept, methodology, research procedures and ethical considerations. The research design is the blueprint for the collection, measurement and analysis of data; the plan and structure of investigation so conceived as to obtain answers to research question.

In this chapter a full exposition of the investigation or research will be given, thereby giving special attention to samples, measuring instruments, data analysis, and procedure for analysing qualitative data.

Chapter 5: Research results and interpretation

The results of the study are given in this chapter. This includes every table, figure, diagram or graph with suitable descriptive heading and numbering. In this chapter the results of the survey are presented, analysed and interpreted.

Chapter 6: Discussions, conclusions, implications and recommendations

The outcome of the study is fully discussed in this chapter, with cross-reference to other relevant studies, as well as to the underlying theory. This chapter closes with a general conclusion where the implications of and recommendations emanating from the study are also presented.

CHAPTER 2

LITERATURE REVIEW AND THEORETICAL FOUNDATION

2.1. INTRODUCTION

Funds in possession of government do not belong to government, but to the taxpayers from whom this money has been collected, and therefore should be dealt with in a

responsible manner. Financial decision-making by government should always be aimed

at the most reasonable and equitable way in which financial resources can be allocated, and also at the most efficient and effective way in which financial resources can be applied to satisfy the collective needs of the public (Geldenhuys,1997). These are some of the important democratic values that should serve as the basic principles in the management of public finance. The values mentioned place more emphasis on the management of government resources by responsibility programme managers and their subordinates, and this also calls for basic financial management skills on the part of those officials who have been entrusted with the responsibility of handling public funds in their day-to-day functions.

Politicians and government officials both belong to society. Both are chosen and appointed to perform certain functions for society. For this reason, a system of financial management must be maintained whereby society can be assured of a government that

is accountable.

The South African Government's current service delivery initiatives are geared towards outcomes (priorities) and output, thus a programme-based and result-oriented approach to budgeting, rather than the traditional input-based approach in service delivery.

All these initiatives are aimed at improving the performance of the state at national and provincial level, and eventually putting more pressure on all government officials to perform, hence the importance of basic financial management knowledge and skills.

Government at all levels and in all structures (i.e. departments, programmes and their divisions), is accountable to society. Programme managers and their subordinates in various departments are responsible for specific functions involving utilisation of personnel, application of control measures, and financial management of their programmes (sub-programmes, elements, or activities). What is of great importance to note is that the majority of activities within government departments are taking place outside the Financial Management (i.e. Chief Financial Officer's) division, which is where we find that category of managers who do not have basic financial management skills.

The problem of lack of financial management skills calls for the need for training and development interventions in this discipline and other related courses (e.g. project management, information and communications technology, engineering sciences, etc.) which are aimed at building the capacity of non-core financial management officials, to enable them to perform their tasks in line with specified standards and regulations (i.e. legislative prescripts, policies and frameworks, procedures or operational manuals, political mandates, etc.). These will enable the departments to improve their managers' performance, objectives, and service delivery to the public.

In the case of the North West Provincial Government, the main purpose of the research was to determine the relevance and importance of training and skills development in financial management to non-core financial managers in provincial departments, and the consequential impact thereof on service delivery.

The aim of this chapter, after studying various literatures, is to make reference to authors and their publications in relation to the importance of financial skills in the management of public funds, and benefits derived in terms of improvement of service delivery.

The primary focus of the research is on financial management skills for non-core financial managers, within the category of middle management services, which is limited to those at salary or post level 9 to 12 who are commonly referred to as Assistant Directors and Deputy Directors, and the impact of their performance towards service delivery.

These officials are mainly involved in the management of the operational activities of their various provincial departments.

This also form the basis of the primary research problem and subsequent questions, that being lack of financial management skills and subsequent poor departmental performance and service delivery.

Secondly, the focus is on the examination of skills development intervention in financial management, with specific reference to non-core financial managers, in relation to government reforms in public financial management and service delivery improvements initiatives. This will be the basis of the secondary research problem and subsequent questions.

2.2 THE REVIEW OF PUBLIC FINANCIAL MANAGEMENT REFORMS

According to Pretorius and Pretorius (2008), effective Public Financial Management systems are required to maximise the efficient use of resources, create the highest level

of transparency and accountability in government finances and to ensure long-term

economic success. They go further by indicating that sound Public Financial Management (PFM) systems are important for service delivery, poverty reduction and the achievement of millennium development goals (MDG).

These statements explain the link between the efficient performance of government, in managing its resources, and economic growth. This efficiency can only be achieved if sound financial management systems are implemented.

Human resource therefore becomes an important element in the management of financial systems. Employees, being part of human resource, must be trained and skilled to be efficient in managing government resources.

The biggest question that everyone would be asking is "What triggered these Public

Financial Management (PFM) reforms?"

Triggers for PFM reforms, according to Pretorius and Pretorius (2008), include the following:

Fiscal crisis - Notwithstanding the fact that there is an economic phenomenon

of limited resources available to satisfy unlimited demand for government services, the global economic recession during the past two years has compounded this problem by exerting more pressure on world governments' fiscal resources. This had a negative impact on the provision of basic services to the public, since less tax income was collected by governments, as a result of many firms having to close down their operation because of the economic crisis.

Public pressure for more services. In the past years, South Africa has

witnessed a spate of violent protest marches by various communities within municipalities, expressing their anger and dissatisfaction about poor services and lack of proper financial management on the appointed officials.

Donor pressure - The concerns about funds not being used for intended

purposes and the associated impact on development effectiveness and their (donors) reputation.

Political change including post-conflict situations and the demand of regional

affiliations, such as European Union (EU) accession. This was no exception for South Africa, especially emerging from its past history of apartheid, and subsequent developments within the African continent such as African Union accession. In these post-conflict situations, the establishment of an overall framework for public financial management is considered to be an important first step for sustainable peace as well as economic growth.

The major areas that have experienced reform in terms of Public Financial Management in South Africa include, amongst others:

Integrated financial management systems (IFMS). South Africa is in a process of implementing the newly Integrated Financial Management System (IFMS), through the National Departments of Finance, State Information Technology Agency (SITA), and Public Services and Administration (DPSA), to replace the outdated legacy stand-alone systems that could not "talk" to one another (or integrate).The IFMS project is an important component of government's interventions and initiatives that are aimed at improving service delivery to the citizens of the country, through standardized and integrated business processes, information, governance and reporting (DPSA, 2009).

The focus areas of systems targeted by the project are the following:

Financial Management - Basis Accounting System (BAS) for preparation of financial statements and reporting

- Human resource management - PERSAL system for human resource management and salary or payroll administration

Supply chain management - LOGIS system for procurement and management of goods and services, inventory and capital assets

- Business intelligence system for providing historical, current and predictive views of operations, through online analytical processing, analytics, data mining, process mining, business performance management, benchmarking, text mining and predictive analytics.

Medium-Term Expenditure Framework (MTEF), with more emphasis on performance-based budgeting, and the development of appropriate incentive systems for civil servants and politicians. Cost-saving measures by government officials are a reflection of efficient financial management of resource, which requires personnel with basic financial skills. Improving public financial

management will require government-wide transformation of people, processes and systems (National Treasury, 2012)

General tax administration reforms, with the main objective of collecting more funds for government revenue funds. These initiatives are aimed at increasing government's income "envelope", to meet its increasing expenditure. High demands for services from the public mean increased expenditure for government.

Supply chain management reforms and the modernization of procurement systems, with the incorporation of reconstruction and development policies aimed at empowering the previously disadvantaged communities. The report of the Auditor General of South Africa, for the financial year that ended on 31st March 2010, has reflected seriously corrupt procurement practices in contravention of supply chain management processes and legislative prescripts. This has prompted the National Department of Finance to re-visit the current supply chain management prescripts and processes, and also the competencies of the officials involved.

Internal Audit. The Internal Audit function plays a very important role in the evaluation of the effectiveness of internal controls, and achieves this objective and better results when working together with management rather than in a more confrontational or policing role. Effective internal controls are essential for the integrity of the overall Public Financial Management system

International Public Sector standards. In South Africa Generally recognized Accounting Practices (GRAP) were developed by the Accounting Standard Board (ASB), to improve consistency and comparability of financial reporting. Other aspects include challenges from the move from Cash-base to Accrual Accounting.

Supreme audit institutions such as the Auditor-General in South Africa play an important role in holding both National and Provincial Governments to account. The role of the legislature, the Standing Committees on Public Accounts (SCOPA) or various sector portfolio committees, to improve departmental accountability.

Given the above areas of development, there is a strong realization that money alone will not buy reform. This brings to the fore the importance of human resources or people, in the execution or provision of various government functions towards service delivery. Pretorius and Pretorius (2008) highlight a lack of professional skills, rather than managerial skills, as a serious constraint on public financial management reform.

Professional skills include financial management skills. The South African Government, like the rest of the world, is experiencing this particular problem of lack of financial skills within its national and provincial departments. This brings us to the most important

aspect of capacity building, which incorporates training and development, and change management.

2.2.1 International trends in Public Financial Management Reforms

The United Nations as an organization operating in an open system environment should constantly adapt to changes that call for the development and capacity building of human resources, whose changing values, behaviour and attitudes are important for the success of any reform. Reforms within the UN provide useful frameworks for all major international organisations that include large public sector institutes and international donor agencies (Analoui, 2006). Public Sector reform is a global activity supported by international bodies (UN and Commonwealth). "Efficiency in government is a

"sine-qua-non" for sustainable economic growth, which donors and governments have to promote within the context of New Public Management (NPM) reform, especially in finance and administration.

The UN experience of reform has focused on improvement of efficiency and accountability, reducing duplication of efforts, updating mandates, missions and programs, dealing with fraud, waste, and abuse, effective management of resources, and improving the management/governance of UN throughout its organizations.

The twelfth meeting of Experts on the United Nations Programme in Public

Administration and Finance released a report on human resource development dated

7th

July 1995, stating that "over time, people's demands for services from their governments have increased. In order to respond to such demands, the public sector must depend on the quality of its human resources".

It is essential therefore to improve and upgrade the calibre of human resources in the public sector since this will determine the character and effectiveness of an administrative system. Increasing demand for goods and services has unfortunately been accompanied by an increasing scepticism about the ability of the public sector to conduct its business affairs in a productive manner. The public sector is generally viewed as being administered by incompetent bureaucrats steeped in red tape, indifferent to the needs of the public and unable to effectively deliver the required goods and services, hide their inability by strict adherence to rules and regulations.

Whether or not this sense of incompetence is based on fact, as long as the perception exists, it becomes difficult for the public sector to be effective in the conduct of its affairs.

International organisations' reforms are also relevant to South Africa, as a member country, in terms of public financial management, especially on governance and accountability issues. This places more pressure on the human resource capacity (employees or officials) to deliver on these important aspects. The United Nations Development Programme (UNDP) defines capacity as "the ability of people, institutions and societies to perform functions, solve problems, and set and achieve objectives".

The Organisation for Economic Cooperation and Development (OECD), of which the South African Government is a member country, emphasises that capacity development should take place on an individual, organisational and institutional level.

This brings us to the four inter-related elements that need to be considered when assessing and developing public financial management capacity, which are

.

Resources - quantity and the quality of staff, adequate and timely financial

resources, equipment and facility

Management

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leadership and political will, operational management and change management of the PFM reform programme. Lack of technical skills is a constraint on PFM reform. The OECD report of 2006 provides some examples of successes in Guatamala and Bangladesh, where it was found that involving operational staff in the reform process was essential to prevent derailment and ensure sustainability. Non-core financial managers play an essential part in the operational activities of government, and their involvement in government reform initiatives makes a huge contribution in improving the capacity to perform better.

Institutional framework

-

legislation, procedures and organisational culture. Cultural values help shape people's behaviour. Competing value systems must not undermine reform processes.

Support structures

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the role of tertiary educational institutions and professional bodies, the upgrading of skills through training and the role of consultants. Lack of proper training strategies within the civil service, cross-cultural skills, poor inter-personal skills, understanding of inter-institutional dependencies, are all cited as constraints on PFM reforms. South Africa, like most of the developed and developing countries, has come up with skills development legislation and strategies thereby providing direction on how to address the shortage of critical skills such as financial management.

2.2.2. Government financial legislation

One of the major reform initiatives undertaken by many countries, including South Africa, was the introduction of performance budgeting in government, aimed at improving the management of public expenditure.

This endeavour was also supported by the passing of legislation to ensure commitment and accountability from those officials who are entrusted with the responsibility to manage public funds. According to Van Dooren and Sterck (2006) the financial management system is a high impact structure, and lies at the heart of the policy process. In the USA the Government Performance and Results Act (GPRA) (1993) was enacted to introduce results-oriented planning and reporting in federal agencies (public sector) - this was to evolve towards performance budgeting.

The above measures required the development of the following:

Strategic plan

Annual performance plan Annual performance report.

The role of the General Accounting Office became important is assessing the implementation of GPRA. The USA President's Management Agenda, an election campaign statement, led the way or a new vision on performance budgeting. It supported the further implementation of the GPRA.

This also relates to the South African president's Medium term Strategic Framework (MTSF), which is an electoral mandate towards service delivery and government's performance to achieve that.

According to Van Dooren and Sterck (2006), the Australian Commonwealth's Labour Government (1983-1996) introduced the following initiatives to modernize and improve financial management in the public sector:

Financial Management Improvement Plan (FMIP) -to improve efficiency and effectiveness in service delivery, promotion of techniques and systems to help departmental and agency managers to focus on results, change administrative procedures and practices, and give managers more incentives to manage resources.

The FMIP incorporated a 3-year budget plan framework, a portfolio budget system, and efficiency dividend.

Programme Management and Budgeting Initiative (PMBI) - a framework introduced to link strategic decision making and operational practices. The departmental programmes reflected the hierarchy of corporate goals, and also provided the basic framework for strategic management and performance reporting by departments.

The Australian Coalition Government in 1996 changed the budget structure, from performance-based to accrual-based outcomes and output budgeting and reporting. Amounts appropriated in the budgets are based on the full cost of delivering outputs and outcomes, rather than the expected cash outflows for the year.

In 1997 the Howard Government decided that budgeting and reporting should be accrual-based. The Financial Management and Accountability Act of 1997 became the act governing the financial activities of agencies (public entities), and was amended in 1999 by the Financial Legislation Amendment Act 1999, to facilitate the adoption of accrual budgeting in government departments. In 1998 the accrual reporting for government departments was implemented

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The public sector financial management reforms in South Africa relate to the two case studies of USA and Australia, according to Van Dooren and Sterck (2006), in terms of the following:

The ruling party and President's Electoral Mandate - Political Manifesto and People's Contract, which form part of the election campaign

Medium Term Strategic Framework - The president and the ruling party's political agenda and objectives

Government strategic objectives, priorities, and outcomes Performance budgeting

Service delivery improvement plans and Batho-Pele principles Strategic plans

Medium Term Expenditure Framework Annual Performance Plan

Financial Management Improvement Plans

In South Africa, the Public Finance Management Act (PFMA) of 1999 was passed in support of performance budgeting, which also led to the transformation of financial management in government. Managers were, as a result, introduced to the aspects of strategic planning, annual performance plans, measurable objectives, monthly, quarterly and annual performance reports, as part of the budgeting and financial management reporting processes. To achieve government's national priorities of economic transformation, inclusive growth, and efficient public service delivery, good public financial management is needed (National Treasury, 2012).

With more challenges and pressing demands on service delivery from the citizens, government had to shift its focus towards outcome-based performance, in line with its electoral mandates. The achievement of these outcomes demands critical skills for public servants in their day-to-day operational activities. What is of critical importance is the management of public funds, the responsibility of which rests with middle managers who are largely represented by non-core financial managers.

2.2.3. Corporate governance

There is always a link between good governance and compliance with the law. Corporate governance mainly involves the establishment of structures and processes, with checks and balances that enable directors to discharge their legal responsibilities and oversee compliance with legislation (King Ill Report of Corporate Governance for South Africa, 2009). Corporate governance ensures that the organization and its officials adhere to accepted ethical standards and best practices.

2.2.3.1 Wealth maximisation and management ethics

Atrill (2000) states that there is a risk that shareholder maximisation may be pursued by managers using methods which are not acceptable to the community. Examples may include paying bribes to government officials to secure contracts, employing child labour in under-developed countries to minimise production costs, polluting the environment to avoid the cost of emission controls - thus, when considering a particular problem or course of action, managers should ask themselves whether it conforms to acceptable moral standards (ethical code to guide managers and employees in carrying out their work). While the maximization of wealth is the focus in the private sector, government's emphasis is more on delivery of effective and efficient services to its citizens.

Corporate Governance and the agency problem - Avoiding conflict between interests of shareholders (wealth maximisation) and those of managers (increased remuneration perks). The agency problem - shareholders' wealth (service delivery outcomes / priorities) objectives become managers' objectives (in their performance agreements). In the public service government's mandate carries the aspirations and interests of its citizens, who happen to be the shareholders. Services delivery is what the citizens need, and the government in power must ensure that its electoral mandate is translated into strategic objectives, to be carried out by managers in their day-to-day operational activities.

Corporate governance and economic performance.

Management self-interest can have a profound effect on the performance of the economy, hence guiding principles to monitor and control managers' behaviour.

The aspect of conflict of interest is a major challenge in supply chain management, which is currently being addressed by the South African National Treasury as a result of fraud and corruption incidents or practices that have been identified by the Auditor-General, where employees are doing business with government.

This brings to the fore the compliance aspects of disclosure, where management officials are requested, in terms of the Public Service Act, to complete disclosure forms or declare their private business interests, in their annual performance agreements or when they are engaged in procurement processes. This area touches on ethical conduct of management officials who are actively involved in the day-to-day activities of government. The majority of these officials fall under the category of non-core financial managers.

2.3 SOUTH AFRICAN GOVERNMENT REFORM INITIATIVES IN PUBLIC FINANCIAL MANAGEMENT

2.3.1. Accelerated Shared Growth Initiative for South Africa (ASGISA)

ASGISA is a national growth initiative to be shared by all stakeholders involved in economic activities (government, labour, and the business community) aimed at addressing government's core objective as set out in 2004, to half poverty and unemployment by the year 2014. These core objectives emanate from National Government Priorities or outcomes, as set out in the United Nations' Millennium

Development Goals (MDG). This initiative is dependent on the improvement in the

performance and job creating capacity of the country's economy.

That means the South African economy has to sustain certain levels of economic growth (e.g. between 3 and 5 per cent) annually to be able to create job opportunities, and thereby reduce unemployment and poverty among its people.

The shortages of skilled professionals, managers, artisans, and poor quality of education have been identified as constraints or impediments towards achieving this objective. Financial management is one those rare skills that are included, especially in managers and professionals.

When the global economy went into a recession during the past two years, the South African Government identified infrastructure and private investment programmes as drivers for its economic growth. This was given impetus by the 2010 World Cup infrastructure development initiatives, which were then underway. Initiatives like these enabled the country to limit the negative impact of the economic meltdown, which affected other counties adversely.

Despite the positive effect of infrastructure development, the single greatest impediment is still shortage of rare skills in both the private and the public sectors. The local government sector, especially municipalities, is the most affected sphere, followed by sector specific national and provincial departments.

2.3.2 Joint Initiative for Priority Skills Acquisition (JIPSA)

JIPSA is a spin-off or a by-product of ASGISA, which was established as a structure or a national initiative, led by a committee of key cabinet ministers, business leaders, trade unions, education and training providers or experts, to identify urgent skills needs and quick and effective solutions thereof. JPSA has been established to develop strategies for fast-tracking skills delivery in the identified priority areas, and also eliminate any obstacles and challenges so as to support ASGISA's objectives of accelerating economic growth, and halving poverty and unemployment by 2014.

The approach of the JIPSA initiative has been to generate the information required to define the skills shortages more closely, create the environment in which government departments can fast-track some of their own skills development plans and work more closely together, and to engage more effectively with the private sector and organized labour to increase the supply of priority and much needed skills.

Various education and skills development interventions are being undertaken to address the skills problem. On the financial management side, National Treasury in conjunction the Department of Public Services and Administration, has embarked on financial management capacity building initiatives, starting with the Chief Financial Officer divisions. These interventions, to a large extent, do not include the non-core financial divisions of departments (nationally and provincially).

The interventions include the following:

The Financial Management Capability Maturity Model - A self- assessment tool used in a survey to determine national and provincial departments' capabilities to discharge their duties with particular reference to Financial Management, Risk Management, and Internal Audit.

The Competence Framework for Financial Management to standardize job profiles and competencies in various financial management functions.

The Learning Framework for Financial Management - A vehicle to implement training and development initiatives, to address the skills gaps identified in the financial management (CFO) divisions of national and provincial departments. Implementation of the Integrated Financial Management System (IFMS). The IFMS is aimed at improving service delivery to the citizens of the country through standardisation and integration of business processes, information, governance and reporting. The objective of the project is also to replace outdated legacy stand-alone systems that could not "talk" to one another (or integrate).

Although the above focus is on those officials who are directly involved with the day-to-day financial management of their departments, it also assists in the development of interim measures to address skills shortage in areas affecting non-core financial managers.

The issue of skills shortage is very much of a cross-departmental matter, involving a range of government departments and affecting institutions both in the public and private sectors.

2.3.3 The impact of current skills development initiatives by the National Treasury on the North West Provincial government

One important point to note is that current interventions on improvement of public financial management by the South African government, through National Treasury in conjunction with the Department of Public Services Administration (DPSA), are mainly focused on improving the performance of officials falling within the Chief Financial Officer's division, for all spheres of government (national, provincial, and municipalities).

Current skills development initiatives are undertaken by the National Treasury against a background where weaknesses in the broad financial management in Government institutions have been clearly identified as a general and serious problem.

The Auditor-General's reports have consistently identified a need for improvement in the management of public finance, as it is the case with the previous financial year's (2009/2010) audit outcomes.

The focus of the current initiatives by National Treasury is on the Financial Management (CFO) divisions of both national and provincial departments. This has been motivated by recent Auditor-General's reports that have raised concerns on the competency, efficiency and qualifications of Chief Financial Officers and their staff.