Financial Management Guide: An Overview and Field Guide

The District Health Systems (DHS) across South Africa are the decentralised building blocks of the National Health System. The aim of the DHS is to have decisions made locally about services and resources. When this happens properly, communities can enjoy good access to services and resources, with ultimately an improved health status. South Africa has now reached the stage where Local Government demarcation and transformation is in the final stage of completion. The boundaries of Health Districts are finalised and District H e a l t h Management Teams are building muscle to manage the district resources and services. This document aims to contribute to the strengthening of district management c a p a c i t y, with emphasis

on financial management. The starting point in district service delivery is to have a district health plan. The district health plan shows how services are organised as well as how resources (such as finances and personnel) are combined to render the service. As public resource management is guided by several acts, the way services and finances are managed should allow for accounting according to this regulatory framework. Background to the Field Guide The idea to develop an Overview and Guide for District Health Managers on Financial Management arose after a range of capacity building initiatives had been conducted in several districts across South Africa. During these initiatives it became clear that districts had common problems with regard to financial management. For example: ◆ There was no comprehensive and strategic approach to financial management. ◆ There was very little linking of service and financial management. ◆ There was a lack of good organisational processes for managing finances. ◆ There was a shortage of technical skills. ◆ Financial management was often seen as a difficult skill that only a few people have. This document aims to do the following: 1. It aims to make concepts of financial management clear and accessible in order to help District Health Managers in their task. 2. It gives an overview of financial management concepts, processes and techniques that can be used in the financial management of a district. 3. It aims to make clear the different steps in the financial management cycle, analyses the task of district management and takes the manager step by step through the financial management cycle. S E C T I O N1 I n t r o d u c t i o n Financial Management: An Overview and Field Guide for District Management Teams T 1 Purpose This Guide is not intended as a ‘how-to-do-it’ document. It aims to provide a framework for approaching the financial management cycle and to operate within the regulatory framework. Financial Management: An Overview and Field Guide for District Management Teams 2 This section provides a brief overview of the Public Finance Management Act (and similarly the Municipal Finance Management Act), the Treasury Regulations and the key role-players in the Financial Management arena. ealth Districts operate within certain rules and regulations that guide financial management. The most important pieces of legislation are: 1. The new Public Finance Management Act (PFM Acts 1 and 29 of...

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