GENERIC STRUCTURE FOR THE FINANCIAL .... Draft...1) This competency cuts across the internal control within the organisation and is not purely about financial internal controls. It

National Treasury

GENERIC STRUCTURE FOR THE

FINANCIAL MANAGEMENT FUNCTION

(Office of the CFO)

DEPARTMENTAL HEAD

INTERNAL AUDIT ENTERPRISE RISK

MANAGEMENT

FINANCIAL MANAGEMENT

(Office of the CFO)

1. The role of the CFO is to support the Accounting Officer (A0) in discharging his/ her responsibilities. The AO may delegate functions to any

person, including the CFO. This is a functional structure and therefore does not talk to positions and levels within an organisation. The levels

and final structures are determined in accordance with organisational design principles issued by DPSA

2. The Internal Audit function is an independent governance structure whose function is to provide oversight role on the systems of internal

control ,risk management, and governance. The Audit Committee assists the AO in the effective execution of his/her duties. (Internal Audit

Framework March 2009, 2nd Edition)

3. The responsibility for Enterprise Risk Management (ERM) lies with AO and management. (Internal Audit Framework March 2009, 2nd Edition)

4. The operation of the internal control system is the responsibility of the relevant line managers. However due to the occurrence of repeat audit

findings, there is a need to strengthen the competency to implement and review controls in organisation

(2) (1) (3)

MANAGEMENT

ACCOUNTING

FINANCIAL

ACCOUNTING

ASSET

MANAGEMENT

SUPPLY CHAIN

MANAGEMENT INTERNAL

CONTROL

(4)

Establish an integrated

internal control systems

(including policies)

Delegations framework

Departmental

governance frameworks

Financial and Financial

Related Systems Control

Assurance services

facilitation

Departmental oversight

and other related

Committees.

Financial information

retention

Departmental fraud

prevention

Departmental loss

control system

INTERNAL CONTROL


(Office of the CFO)

GOVERNANCE FACILITATION:

ASSURANCE

SERVICES

FRAUD & LOSSES

MANAGEMENT

• Exception Reports

• Interface Reports

• Conduct appropriate

systems maintenance

SYSTEMS CONTROL

(1)

1) This competency cuts across the internal control within the organisation and is not purely about financial internal controls. It is a management

system , culture and set of values designed to ensure that the organisation is managed efficiently and effectively, with the appropriate policies

and procedures that promote the achievement of its overall goals and objectives.


(Office of the CFO)

MANAGEMENT ACCOUNTING

PLANNING

BUDGETING

MONITORING AND

REPORTING

Provide inputs to the strategic

plan

Provide inputs to the annual

performance plan

Business and project planning

MTEF budgeting process

Estimates of expenditure

(National & Provincial)

Adjustments estimates

Rollovers

Monthly cash flow and

adjusted cash flow

In-year monitoring

Interim reporting (provide

inputs to performance report)

Annual reporting

Safeguarding of source

documents.

1. This is a support function responsible for providing financial inputs to the strategic plan, annual plan, business and project plan. This does not

replace the strategy and planning unit of a department in the Draft Functional and Organisational Configuration of Corporate Management

Units proposed by the DPSA.

(1)

FINANCIAL ACCOUNTING

REVENUE

MANAGEMENT EXPENDITURE

MANAGEMENT

ACCOUNTING

Cashier & Banking

Services

Debt Management

Accounting &

Reporting

Compensation of

Employees

Goods & Services

Reporting

Transfers & Subsidies

Ledgers/Journals

Asset Accounting

Reporting

1. Financial accounting involves all the procedures necessary to ensure that the department’s financial activities are captured & recorded and

that the transactions are valid, accurate and complete.

(1)


(Office of the CFO)

CASHIER & BANKING

SERVICES DEBT MANAGEMENT ACCOUNTING &

REPORTING

REVENUE MANAGEMENT


• Departmental Revenue

sourcing, fees, tariffs

• Banking

• Safeguarding of cash,

source documents and

face value forms

• Revenue collections

• Recovery of Debt and

allocation of monies

received.

• Debt take-on.

• Accounting for revenue

• Reconciliation of revenue

• Revenue reporting

1. In departments where revenue collection is not a major function, expenditure management may be combined with Revenue Management.

There has to be proper segregation controls in place.

(1)


(Office of the CFO)

Interface of payroll

into accounting

system

Processing of

employee costs

outside the payroll

system

Processing of

employee costs on

the payroll system

Certification of

payroll

Expenditure

Reporting

Interim reporting on

conditional grants

Annual reporting on

conditional grants

Safeguarding of

source documents

EXPENDITURE MANAGEMENT


COMPENSATION OF

EMPLOYEES

GOODS & SERVICES REPORTING

TRANSFERS AND

SUBSIDIES

Verification of

source documents

Processing of

transactions on

accounting system

Processing of

banking details on

the accounting

system

Processing

transfers and

subsidies

1. This function is to ensure that payments are settled in accordance with agreed terms.

(1)

FINANCIAL MANAGEMENT (Office of the CFO)

LEDGERS/JOURNALS ASSET ACCOUNTING

ACCOUNTING


REPORTING

Liability management (accruals)

Accounting for donor funding

Safeguarding of source documents

Clearing suspense accounts

Clearing interdepartmental accounts

Other salary payovers

Annual PAYE reconciliation

Unauthorized, fruitless and wasteful and irregular

expenditure

Receipt or granting of gifts, donations and

sponsorships

Debt Write-off

Establish departmental Accounting Structure

Review Accounting structure.

Completeness of source documents.

Loss control system.

Cash Management.

Petty Cash Management

Bank Reconciliation.

PAYE/UIF Pay-overs.

Reconcile General Ledger to

Fixed asset register.

Allocation between capital and

current accounts

• Liaison with internal and

external auditors

• Interim financial statements

• Annual Financial Statements

• Year end closure

• Month end closure.

1. The purpose of this function is to manage and provide financial administration and

accounting services.

(1)


ASSET MANAGEMENT

(Movable & Immovable)

Fixed Asset Register,

inspections

Maintenance

Leases management

Reporting

• Asset management plan

• Performance and

management of asset

acquisition process

• Internal and external

transfers of assets

• Physical verification of assets

• Identification of assets for

disposals

• Facilitation and management

of safeguarding of assets

• Facilitate recording of loss,

damage or mismanagement

of assets

• Maintenance of the asset

register

• Reconciliation of assets

Asset maintenance plan

and process

Maintenance of asset

Performance and

management of leasing

process

Reporting on assets

Optimal utilization of

asset management

systems

Where the nature of the asset is said to be technical and is beyond the scope of the CFO, the CFO cannot be said to be managing the asset.

Instead, individuals with the necessary competency will be required to take over the management of the asset on behalf of the CFO. The

management of the fixed asset register, accounting and the reporting for the asset will remain the responsibility of the CFO. While the

functions may appear similar, the knowledge required is vastly different. This function excludes management of biological assets, military

assets, assets belonging to trading entities, investments (shares and unit trusts and financial instruments.

(1)


SUPPLY CHAIN MANAGEMENT

DEMAND

MANAGEMENT

ACQUISITION

MANAGEMENT

LOGISTICS

MANAGEMENT

DISPOSAL

MANAGEMENT

RISK &

PERFORMANCE

MANAGEMENT

CONTRACT

MANAGEMENT

Needs

analysis

Annual

procurement

plan

Funding

Compilation of

specifications

and terms of

reference

Strategic sourcing

Provide secretariat

services

Compilation of bid

documents

Receiving and opening of

bids

Evaluation and

adjudication of bids

Compilation of prospective

list of providers for

quotations

Analysis of procurement

request for quotations

Sourcing suppliers for

quotations

Handling urgent and

emergency cases

Contract

administration

Supplier

performance

Managing

contracts

Requisition of

goods and

services

Placing orders

Receiving

goods

Goods

distribution

Inventory

management

Warehouse

management

Stocktaking

Matching

documents

Preparation of

payment

documentation

Preparation for

disposal

Disposal

process

Control of

disposal

documentation

Risk management

of the SCM

SCM performance

review

Reporting on SCM

information

Optimum system

utilization

Safeguarding of

SCM information

1. SCM is about strategic sourcing which requires product research, understanding economic conditions, and the use of price indices.

In smaller departments, the link between SCM, Asset Management and Budgeting is critical in ensuring that the department has the correct

resources to do its work.

In smaller departments consideration should be given to combining SCM & Asset Management

(1)


HEAD OF DEPARTMENT

INTERNAL AUDIT

RISK MANAGEMENT

INTERNAL

CONTROL

Governance

Facilitation :

Assurance

Services

Fraud and Loss

Management

Systems

controller

MANAGEMENT

ACCOUNTING

Strategic

Planning

Budgeting

Reporting

SUPPY CHAIN

MANAGEMENT

FINANCIAL

ACCOUNTING

Demand

Management

Acquisition

Management

Logistics

Management

Disposal

Management

Revenue

Management

Expenditure

Management

Accounting

Risk &

Performance

Management

Contract

Management

ASSET MANAGEMENT

(Movable & Immovable)

Fixed Asset Register,

inspections and

Inventory management

Maintenance

Leases management

Reporting

This a typical Financial Management functional structure including all traditional financial management functions.

OPTION 1


HEAD OF DEPARTMENT

INTERNAL AUDIT

RISK MANAGEMENT

INTERNAL

CONTROL

Governance

Facilitation :

Assurance

Services

Fraud and Loss

Management

Systems

controller

MANAGEMENT

ACCOUNTING

Strategic

Planning

Budgeting

Reporting

SUPPY CHAIN

MANAGEMENT

FINANCIAL

ACCOUNTING

Demand

Management

Acquisition

Management

Logistics

Management

Disposal

Management

Revenue

Management

Expenditure

Management

Accounting

Risk &

Performance

Management

Contract

Management

This option incorporates asset management into SCM

OPTION 2


ASSET

MANAGEMENT

HEAD OF DEPARTMENT

INTERNAL

CONTROL

Governance

Facilitation :

Assurance

Services

Fraud and Loss

Management

Systems

controller

MANAGEMENT

ACCOUNTING

Strategic

Planning

Budgeting

Reporting

SUPPY CHAIN

MANAGEMENT

FINANCIAL

ACCOUNTING

Demand

Management

Acquisition

Management

Logistics

Management

Disposal

Management

Revenue &

Expenditure

Management

Accounting

Risk &

Performance

Management

Contract

Management

This option combines expenditure and revenue management. This is where the department’s revenue collection function is few and far between.

OPTION 3

INTERNAL AUDIT

RISK MANAGEMENT

MOVABLE & IMMOVABLE

ASSETS

Fixed Asset

Register,

inspections

and Inventory

management

Maintenance

Leases

management

Reporting


Documents

GENERIC STRUCTURE FOR THE FINANCIAL .... Draft...1) This competency cuts across the internal control within the organisation and is not purely about financial internal controls. It