The Financial and Fiscal Commission (Commission) was established in terms of Chapter 13, Section 220 of the Constitution although it was also provided for in the Interim Constitution “There is a Financial and Fiscal Commission for the Republic which makes recommendations envisaged in this Chapter, or in national legislation, to Parliament, provincial legislatures and any other authorities determined by national legislation. The enabling legislation under which the Commission functions currently is the Financial and Fiscal Commission Act, 1997 as amended in 2003 The Ad Hoc Parliamentary Committee on the review of Chapter 9 and Associated Constitutional Institutions (2007) made some findings and recommendations on the governance model of the FFC among others The Act provided for a Chairperson who was also the Accounting Officer and Chief Executive of the Commission (conflict with governance principles and PFMA) The Commission then started an engagement with the Minister of Finance on the need to rectify the situation and address other issues raised by the Ad Hoc Committee

1. FINANCIAL AND FISCAL COMMISSION
AMENDMENT BILL 2015
PRESENTATION TO WESTERN CAPE PROVINCIAL
LEGISLATURE
For an Equitable Sharing of National Revenue
26 May 2015

2. CONTENT
• Introduction
• Aim of the Bill
• Proposed amendments
• Views of the Financial and Fiscal Commission on the Bill
• Conclusion
2Financial and Fiscal Commission Amendment Bill

3. BACKGROUND
 The Financial and Fiscal Commission (Commission) was established in terms of Chapter 13,
Section 220 of the Constitution although it was also provided for in the Interim Constitution
 “There is a Financial and Fiscal Commission for the Republic which makes
recommendations envisaged in this Chapter, or in national legislation, to Parliament,
provincial legislatures and any other authorities determined by national legislation.
 The enabling legislation under which the Commission functions currently is the Financial and
Fiscal Commission Act, 1997 as amended in 2003
 The Ad Hoc Parliamentary Committee on the review of Chapter 9 and Associated
Constitutional Institutions (2007) made some findings and recommendations on the
governance model of the FFC among others
 The Act provided for a Chairperson who was also the Accounting Officer and Chief
Executive of the Commission (conflict with governance principles and PFMA)
 The Commission then started an engagement with the Minister of Finance on the need to
rectify the situation and address other issues raised by the Ad Hoc Committee
3Financial and Fiscal Commission Amendment Bill

4. BACKGROUND
• The Commission’s own interrogation of its mandate also led to discussions with the
Minister on the need to tighten the role in as far as it relates to unfunded mandates
through the amendment of Section 3 of the Act and also allowing the Commission
latitude in determining how it deals with organs of state in the implementation of its
broader mandate.
• There were also issues relating to the remuneration of Commissioners which was
supposed to be determined by the President in consultation with the Minister of
Finance and taking account of the recommendations of the Commission on the
Remuneration of Public Office Bearers
• This is dealt with through the Amendment of the relevant Act
4Financial and Fiscal Commission Amendment Bill

5. AIM OF THE BILL
• The main aim of the Bill is to propose amendments to the principal Act to
enhance the institutional and other governance arrangements and
functioning of the Commission and to fully align the principal Act to the
Constitution, 1996 and the Public Finance Management Act, 1999
• The ancillary objects of the Bill are to propose amendments to the principal
Act, update obsolete terminology, refer to the Constitutional mandate of the
Commission, repeal repetitive provisions and obsolete transitional
arrangements
• The Commission is in concurrence with and supports the proposed
amendments
5Financial and Fiscal Commission Amendment Bill

6. PROPOSED AMENDMENTS
Section Heading Explanation
1 Definitions -terminology was deleted, clarified and new terms
inserted
-insertion of the definition for “chief executive
officer”, “ independent commission” and “Public
Finance Management Act”
-substitution for the definition of “financial year”
-deletion of the definition for “state department” and
“this Act”
3 Functions This section is amended to align it to the Constitution,
1996 and other legislation and to strengthen the
requirements for organs of state concerning the
Commission’s recommendations on the assignment of
a power or function by an organ of state in one sphere
of government to an organ of state in another sphere
of government
6Financial and Fiscal Commission Amendment Bill

7. PROPOSED AMENDMENTS
Section Heading Explanation
4 Powers The governance role of the Commission
is described-to determine and oversee
the strategic direction and operational
policy of the Commission
5 Composition To clarify the time frame regarding the
filling of posts in the event that a
vacancy arises
6 Chairpersons The appointment of the Chairperson and
Deputy Chairperson is repealed as it is
already covered in the Constitution,
1996
7Financial and Fiscal Commission Amendment Bill

8. PROPOSED AMENDMENTS
Section Heading Explanation
8 Terms of Office The terms of office to members of the Commission
are clarified. The Chairperson is appointed full time
and other members of the Commission are
appointed part-time. Members that are appointed
full time will continue until the expiry of the term
9 Remuneration, allowances and
benefits
This section gives effect to section 219(5) of the
Constitution by introducing measures for the
determination of the remuneration, allowance and
other service benefits of the members of the
Commission similar to the other constitutional
institutions
12 Vacancies This section is repealed in the principal Act as it has
been covered under section 5
8Financial and Fiscal Commission Amendment Bill

9. PROPOSED AMENDMENTS
Section Heading Explanation
14 Meetings This section has been repealed. The
scheduling of meeting will be covered under
the Rules of Procedure
16 Rules of Procedure This section has been elaborated. The
Commission must develop Rules to ensure
the effective corporate governance of the
Commission, the distinct roles of, and the
relationship between, the Chairperson of the
Commission and the chief executive officer
and the conduct of the employees of the
Commission This section is in keeping with
the constitutional status of the Commission
New Section
18A
Conduct of members This is a new section pertaining to member’s
conduct
9Financial and Fiscal Commission Amendment Bill

10. PROPOSED AMENDMENTS
Section Heading Explanation
19 Administrative responsibilities of
chairperson
The appointment, functions, responsibilities and
duties of the chief Executive officer are set out in
this clause. The Chief Executive Officer is the
Accounting Officer and Secretary to the
Commission. Distinct separation from the
Chairperson of the Commission
20 Terms and conditions of
employment
Employees and persons in the public service that are
seconded to the Commission are subject to the
control and discipline of the CEO
21 Pension benefits Alignment to the Public Service Act
24 Accountability The CEO is the accounting officer. Alignment to the
Public Finance Management Act, 1999
26 Annual Report The date for submission of the annual report is
aligned to the Public Finance Management Act
10Financial and Fiscal Commission Amendment Bill

11. PROPOSED AMENDMENTS
Section Heading Explanation
27 Information required by
Commission
This section enables the Commission to
obtain information from any organ of state or
person required for performance of its
functions
Sections 30,
31, 32, 33
Regulations, (Transitional
arrangements) Definitions,
members of previous
commission, transfer of assets,
liabilities, staff etc, financial
and administrative records
Repealed
11Financial and Fiscal Commission Amendment Bill

12. THE PROCESS
• The Commission has been in consultation with the Minister through out the drafting of the
Bill until the stage when the Bill was tabled in Cabinet in late 2014
• The Bill enhances the good governance principles
• The CEO to fulfil the roles of accounting officer and secretary to the commission
responsible for operational and administrative responsibilities
• There is now a distinct accountability and responsibility functions
• The profile of the Commission is raised amongst its stakeholders
• Appointment of Chairperson in a full time capacity.
• The initial Draft as tabled in Parliament had sought the appointment of all the Commissioners
including the Chairperson to be part-time.
• The current practice is that the Chairperson and the Deputy Chairperson are both fulltime
(although the situation is that there has been a vacancy for Chairperson since September
2010)
– The Commission furnished various written and oral submissions in favour of the
appointment of the Chairperson to be in a full time capacity. Bill now provides for the
appointment of the Chairperson to be full time
12Financial and Fiscal Commission Amendment Bill

13. CONCLUSION
• The Commission is of the view that the Bill has addressed the concerns
around the governance challenges
• The Commission welcomes the changes in the institutional arrangements
when it comes to determining how it engages with organs of state in
implementing its mandate
• The Commission also welcomes the Bill in as far as it puts limits in terms of
the manner in which vacancies must be filled and remuneration of
Commissioners determined
• The Commission is of the view that the amendments will not have any
significant extra costs to the fiscus
– What has happened is that the position of full time Deputy Chairperson has
literally been replaced by that of a CEO who is not a Commissioner but an
official employed by the Commission.
13Financial and Fiscal Commission Amendment Bill

14. THANK YOU.
Financial and Fiscal Commission
Montrose Place (2nd Floor), Bekker Street,
Waterfall Park, Vorna Valley, Midrand,
Private Bag X69, Halfway House 1685
www.ffc.co.za
Tel: +27 11 207 2300
Fax: +27 86 589 1038