ESI Africa spoke with Jane Masite, President of the Institute of Municipal Finance Officers (IMFO), along with the Vice President, Sidwell Mofokeng, on the role of the public sector finance officer in infrastructure development and the importance of communication, planning and risk management.

Listen to the full interview here

In response to whether there is a difference to being a finance officer in the public sector from operating in the private sector, Jane Masite, president of the IMFO, explained that in terms of training there is no difference; however, in the workplace, there is a difference in terms of legislation and standards that the finance offers must adhere to.

In the municipal sector, Sidwell Mofokeng, vice-president of the IMFO, adds that general accounting reporting standards used concentrates efforts around revenue collection – called an accrual system, which is an accounting method that records revenues and expenses when incurred, regardless of when money is exchanged – whereas in the private sector, it relates more to cash flow management.

Budgets and communication

When planning for large infrastructure development projects, it is important that the finance officer has budgeted for maintenance at the same time. Each infrastructure asset that has been acquired, such as a transformer, has a life span sometimes up to 20 years, therefore to keep that asset operating optimally, it must be maintained in terms of the manufacturer’s specific standards.

Mofokeng advises that the maintenance history of the asset is also a good tool to determine the asset’s useful lifespan. This information can be used to determine whether the asset will be operational for another five years, or whether it is time to budget for its replacement.

Listen to the full interview here

To achieve planning objectives integrated communication among all departments within the organisation is important, as everyone will be aware of the finance aspects. For instance, the fixed assets’ register needs to be ‘alive’ on a continuous reporting basis and for this to be accomplished there should be proper communication between departments.

[quote]“This is really important because once you acquire an assert, you have got to have a maintenance plan and there has to be maintenance budget and the budget increases as the assets get older, the maintenance costs get higher so the CFO must be able to plan accordingly over the life span of the asset,” explains Mofokeng.

The finance officer must not only focus on accounting, but must be able to think strategically in terms of the vision of the entity and what the financial plan would be to support that vision. The finance officer’s job includes knowing the trends in the market, the areas where the municipality must spend its money in terms of either attracting investment, or setting aside an adequate budget for capital investment, such as infrastructure build.

IMFO annual indaba

At the recent IMFO Audit & Risk Indaba held in Cape Town, the topics that dominated discussion were the role of government in service delivery, financial planning, and strategic planning required to achieve objectives for service delivery, along with oversight and reporting.

Another topic that kept attendees glued to their seats was how practitioners can best protect the public using their expertise in risk management, internal auditing and managing of performance.

“How politicians are ensuring that the money is spent for the purpose it was intended and where there was diversion from the plan, what are the action that needs to be taken and in future how do we prevent that from happening,” concludes Mofokeng.

Listen to the full interview here

 

About the IMFO

The Institute of Municipal Finance Officers (IMFO) is the recognised professional body for finance, audit, risk management, performance management and related professionals in the public sector. The Institute was founded in 1929, and is dedicated to establishing and maintaining high standards of professionalism among practitioners by providing a framework for them to collectively enhance, maintain sustainable financial management and good governance in the management of public finances.