Analysis of the financial management practices in the Provincial Department of EDTEA Pietermaritzburg, South Africa.

Abstract

The financial management practices are a function of the financial management department of the organization. Financial management practice is an organizational activity aimed at the adequate management of funds that achieves the objectives of the organization. Financial management practices hence serves as a yardstick to financial management performance of the department. It acts as an evaluation tool for the department’s financial management system. The intention of this research is to identify some of the main findings the study of the analysis of the financial management practices in the Provincial Department of Economic Development, Tourism and Environmental Affairs (EDTEA) can provide for their role players: the accounting officer, chief financial officer and managers in the public sector. The researcher’s purpose for this study is to focus on the financial management practices that can be explained through how procedures should be performed and how these practices is fundamental to the successful operations of an organization as it impacts on how the organizations available resources are utilized economically in the public sector. This was achieved through focusing specifically on the financial management practices performed by the financial role players: accounting officer, the chief financial officer and managers in the following financial management functions areas: budgeting, procurement (supply chain management), asset management, finance (expenditure management) and internal control, which are the areas that forms the financial management domain in public financial management. In public financial management the main strategic objectives of financial management practices is to ensure the implementation of the PFMA and other related financial regulations and policies. Furthermore the financial management functions areas: budgeting, procurement (supply chain management), asset management, finance (expenditure management) and internal control, are there to manage the financial management practices by overseeing the full financial cycle of budgeting, procurement, processing of expenditure, and recording of financial transactions. Incorporated in this study are a literature review and an empirical review of which is based on evaluation questions. The findings of the evaluation questions were used to understand the effect of financial management practices in the Provincial Department of Economic Development, Tourism and Environmental Affairs (EDTEA) as well as by taking into account the reviews from the departments financial performance plans, audit reports, annual reports and financial management practices records of which were of a deteriorating standard. Therefore the objective of this research study is to identify, evaluate and analyze the effect of financial management practices in the Provincial Department of Economic Development, Tourism and Environmental Affairs (EDTEA) on the financial management performance of the department. The researcher recommends that the Provincial Department of Economic Development, Tourism and Environmental Affairs (EDTEA) needs to in order to meet the organization’s obligations is to strictly adhere to the financial management practices established such as the treasury financial regulations, policies and the Public Financial Management Act (PFMA), as well as priority needs to be given by the department towards the training and development of all employees in such financial management practice areas so that the financial management standard of the department is under no circumstances compromised.