Instruction No. 4 of 2022/23 is applicable to departments, trading entities, constitutional institutions and public entities listed in Schedules 2 and 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999, as amended (PFMA). The Instruction deals with processes and reporting on various compliance matters included in:
- Sections 38 and 58, and 45 and 57, dealing with unauthorised
expenditure (departments), irregular expenditure and
fruitless and wasteful expenditure (all institutions subject to
- Section 38(1)(f) dealing with payment of suppliers by
departments, trading entities and constitutional institutions.
- Section 51(1)(c) dealing with the responsibility of accounting
authorities and public entities regarding safeguarding of assets
and revenue and expenditure management.
- Section 38(i)(a)(iii) and 51(i)(a)(iii) dealing with the responsibility
of accounting officers and accounting authorities to ensure a fair,
equitable, transparent, and competitive procurement and
The new Compliance Framework issued as part of the Instruction, provides for quarterly and annual reporting on these matters in the prescribed format and include new/amended procedures for steps in identification, confirmation, condonation and reporting on the matters listed above. Annual Report and Financial Statements Impact
Entities are required to include, as part of their Annual Report a detailed section on Compliance Reporting (refer to section E of the Annual Report Guideline).
Details of the Irregular Expenditure, Fruitless and Wasteful expenditure are included in the annual report rather than the financial statement notes. The report will include matters currently under assessment, determination and
investigation and a reconciliation to the amounts disclosed in the financial year.
The note(s) included in the financial statements on Irregular, Fruitless and wasteful will only include irregular expenditure that was confirmed. The amounts must be disclosed inclusive of VAT and includes narrative descriptions on restatements, judgements applied, and disciplinary steps taken on amounts reported on.
Example of disclosures (old and new) *1
Prepared by: Belinda van der Merwe