PUBLIC FINANCE ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

PART II
MANAGEMENT OF PUBLIC FINANCES

   3.   Functions of the Minister

   4.   Establishment of Treasury

   5.   Functions and powers of Treasury

   6.   Secretary to the Treasury

   7.   Controlling officers

   8.   Accountant-General

   9.   Appointment and duties of accounting officers

   10.   Internal Audit

   11.   Appointment and powers of internal auditor

   12.   Audit committees

PART III
CONTROL OF PUBLIC FINANCES

   13.   Consolidated Fund

   14.   Payments from consolidated fund

   15.   Gross revenues

   16.   Appropriation

   17.   Releases of Funds

   18.   Releases to be paid to bank accounts

   19.   Bank balances at end of financial year

   20.   Bank accounts in respect of public money

   21.   Interest on bank accounts

   22.   Investments

   23.   Deposits

   24.   Contingency Fund

   25.   Funds and working accounts

   26.   Existing Funds

   27.   Recoverable advances

   28.   Aided projects

   29.   Losses of money or stores

PART IV
SURCHARGE

   30.   Failure by controlling officer to perform

   31.   Surcharge

   32.   Interim and final order of surcharge

   33.   Attachment of property of officer as security

PART V
CONTROL OF STATUTORY CORPORATIONS

   34.   Representation on statutory corporations

   35.   Conditions for appropriation of grants

   36.   Grants paid to statutory corporations

   37.   Transfer of assets to statutory corporations

   38.   Record of Investments in statutory corporations to be maintained

   39.   Inefficient operations of statutory corporations

   40.   Protection of assets of statutory corporations

   41.   Protection of Government interest on privatisation of statutory corporation

   42.   Recovery of outstanding money

   43.   Dissolution of statutory corporations

PART VI
AUDIT

   44.   Auditor-General to audit accounts of statutory corporations

   45.   Performance audit

   46.   Auditor General may secure services of a gents or specialist consultants

PART VII
GENERAL PROVISIONS

   47.   Unauthorised use of public money

   48.   Consultancy services

   49.   Restrictions regarding agreements

   50.   Abolition of Ministry or departments

   51.   General penalty

   52.   Regulations

   53.   Savings and transitional

   54.   Repeal of Finance (Control and Management) Act

AN ACT

to revise the law relating to the control and management of public finances of the Republic of Zambia; to repeal and replace the Finance (Control and Management) Act, 1969; and to provide for matters connected with or incidental to the foregoing.

[17th December, 2004]

Act 15 of 2004.

PART I
PRELIMINARY

1.   Short title

This Act may be cited as the Public Finance Act.

2.   Interpretation

In this Act, unless the context otherwise requires—

“accounting officer” means a person appointed as accounting officer under section 9;

“Accountant-General” means a person appointed as Accountant-General under section 8;

“advance” means any recoverable sum of money issued pursuant to section 27;

“aided project” means any project which is partially financed through a loan, grant, donation or technical assistance and partially financed from public funds pursuant to section 28;

“Appropriation Act” means an Act passed by Parliament authorising the Republic to incur expenditure of public money for specific purposes;

“appropriations-in-aid” means revenues assigned to and collected by Ministries and departments which they are permitted by the Treasury to appropriate against expenditure voted by Parliament;

“appropriate Minister” in relation to a ministry, Government institution, department, agency or statutory corporation means the Minister to whom responsibility for the ministry, Government institution, department, agency or statutory corporation, as the case may be, is assigned; “Auditor-General” means the Auditor-General appointed pursuant to the Constitution;

“Audit Committee” means a committee established under section12;

“bank account” means an account opened by Government at a bank into which public money “are deposited and drawn; “consolidated Fund” means the consolidated fund established under section13;

“Contingency Fund” means the Contingency fund established under section 24;

“controlling officer” means an officer designated as such pursuant to section 7;

“Controller of Internal Audit” means an officer appointed as such under section 10;

“financial institution” shall have the meaning assigned to it in the Banking and Financial Services Act;

“financial year” means the period of twelve months ending on 31st December in any year;

“general revenues” includes money accruing to the Republic by way of taxes, licences, import fees, fines, levies and charges, sale of Government property and shares, loans, donations and grants raised from within or outside Zambia or any other income due to the Republic;

“Government agency” means any unincorporated person or body of persons to which functions exercisable on behalf of the Republic, involving the use of public money or stores are delegated by or under any written law;

“Government building” means any building owned or occupied or under the control of the Republic and used for Government purposes;

“head of expenditure” means a head of expenditure shown in the estimates of revenue and expenditure in respect of a financial year approved by Parliament pursuant to the Constitution;

“internal audit” means the process of evaluating and assessing the efficiency and effectiveness of internal control systems;

“internal auditor” means an officer appointed as internal auditor under section 11;

“officer” means any public officer;

“Privatisation Revenue Account” has the meaning assigned to it by section 2 of the Privatisation Act:

“Public Accounts” means all accounts required under this Act to be kept by Ministries, Departments or statutory corporations in respect of transactions involving assets or liabilities of the Republic;

“public debt” means financial, material and other resources including guarantees acquired or borrowed by the Government, Government agencies or local authorities in the interest of the Republic;

“Public funds” means funds received by an officer by virtue of the officers employment and includes public money; “public money” means money received by an officer in the course of the officer’s employment or any other person directly or indirectly for the purpose of Government and includes all stores, stamps, negotiable instruments, bonds, debentures, investments and other securities raised or received by or on behalf of, or for the benefit of, the Republic;

“public stores” means all chattels of whatever nature purchased or donated belonging to or in possession of, or under the control of, the Republic and includes plant, vehicles, machinery and equipment;

“statutory corporation” means anybody corporate established by an Act of Parliament in which the Government has a majority or controlling interest, and includes a Government agency;

“Secretary to the Treasury” means the Secretary to the Treasury, appointed under section 6;

“Treasury Account” means the Treasury Account established under section 13;

“Treasury” means the office of Treasury established under section 4; and “working account” means an account established for the purposes defined in section 25 of the Act.

PART II
MANAGEMENT OF PUBLIC FINANCES

3.   Functions of the Minister

   (1) The Minister shall, subject to the provisions of the Constitution and this Act have the management, supervision, control and direction of all matters relating to financial planning and the economic management of the Republic.

   (2) Without prejudice to the generality of sub-section (1) the Minister shall be responsible for—

      (a)   presenting the annual estimates of revenue and expenditure and supplementary estimates to the National Assembly;

      (b)   presenting, half yearly, budget performance reports to the National Assembly; and

      (c)   presenting the annual audited financial report to the National Assembly.

4.   Establishment of Treasury

   (1) There is hereby established the office of the Treasury which shall consist of—

      (a)   the Minister, who shall be the head of the Treasury; and

      (b)   the ministry responsible for financial and fiscal matters.

   (2) The Minister shall make policy and other decisions of the Treasury, except for those decisions taken under delegation or instruction in terms of section 6.

   (3) Powers of the Treasury shall be exercised by the Secretary to the Treasury referred to in section 6 or such other officer as may be authorised by the Secretary to the Treasury in writing.

5.   Functions and Powers of Treasury

   (1) The Treasury shall—

      (a)   promote the Government’s national fiscal policy;

      (b)   co-ordinate the macro-economic policy;

      (c)   manage the national budget preparation process;

      (d)   exercise control over the implementation of the annual national budget, including any supplementary budgets;

      (e)   facilitate the implementation of the Appropriation Act;

      (f)   promote and enforce transparency and effective management in respect of revenue, expenditure, assets and liabilities of ministries, Government departments and statutory corporations; and

      (g)   perform such other functions as may be assigned to the Treasury by or under this Act.

   (2) The Treasury shall, for purposes of performing its functions under sub-section (1)—

      (a)   prescribe uniform treasury norms and standards;

      (b)   enforce the provisions of this Act and any prescribed standards of generally recognised accounting practices and uniform classification systems, in ministries, departments and statutory corporations;

      (c)   monitor and assess compliance with this Act and any prescribed norms and standards by ministries, departments and statutory corporations;

      (d)   assist ministries, departments and statutory corporations in building their capacity for efficient, effective and transparent financial management;

      (e)   investigate any system of financial management and internal control in any ministry, department or statutory corporation;

      (f)   take appropriate steps to redress any serious or persistent breach of this Act by any ministry, department or statutory corporation; and

      (g)   do all such things as are necessary or conducive to the performance of its functions.

   (3) In the event of any dispute arising as to whether access to any account, document, book or record is necessary for the exercise by the Treasury of any functions under this Act or any other written law, the dispute shall be referred to the Minister and the Minister’s decision shall be final.

   (4) Nothing in this section shall be construed as authorizing the Treasury to issue instructions which contravene the Constitution and this Act.

   (5) The Secretary to the Treasury and any other officer authorised by the Secretary to the Treasury shall be entitled to inspect and have full access to all accounts, documents, books and records of any Ministry, department, or statutory corporation as is necessary for the exercise of the functions of the Treasury under this Act and shall be given all available information required with regard to the money and property specified in sub-section (1).

6.   Secretary to the Treasury

   (1) There shall be a Secretary to the Treasury who shall be a public officer and who shall be appointed by the President.

   (2) The Secretary to the Treasury shall be the Chief Executive Officer of the Treasury and the Chief Controlling Officer of the Government and shall exercise such functions as provided in this Act or as may be authorised, in writing, by the Minister.

   (3) The Secretary to the Treasury shall be responsible for—

      (a)   preparing annual estimates of revenue and expenditure pursuant to the provisions of the Constitution;

      (b)   preparing supplementary estimates of expenditure when the situation so demands;

      (c)   quarterly review of the performance of the budget and submitting a report thereof to the Minister;

      (d)   preparing the annual consolidated statement of assets and liabilities including a statement of the public debt of the Republic as well as the consolidated revenue statement;

      (e)   submitting the statements referred to in paragraph (d) to the Auditor General for examination and certification;

      (f)   consolidation of all audited annual revenue statements, appropriation accounts and balance sheets for incorporation in the financial report to be laid before the National Assembly;

      (g)   releasing of funds from the consolidated fund for appropriation by controlling officers;

      (h)   ensuring the implementation of the recommendations of the Parliamentary Committee on Public Accounts;

      (i)   preparing the Treasury Minute in respect of the implementation of the recommendations of the Public Accounts Committee for submission to the National Assembly;

      (j)   the general management and administration of the consolidated fund and other funds established under this Act;

      (k)   opening, maintaining and closing accounting units in ministries, departments and projects;

      (l)   seconding accounting and audit staff to the units referred to in paragraph (k) and ensuring that they perform their duties in accordance with the provisions of this Act and any regulations issued under this Act;

      (m)   ensuring that annual appropriation accounts are prepared and submitted promptly by controlling officers to the Auditor-General for certification and the same are included in the financial report;

      (n)   ensuring that the annual consolidated balance sheet of assets and liabilities of the Republic and consolidated revenue statements are promptly prepared by controlling officers for certification by the Auditor-General;

      (o)   ensuring that consolidated financial statement for statutory corporations are prepared in accordance with generally recognised accounting practice for each financial year;

      (p)   compiling in accordance with international standards and publishing in the Gazette, financial statistics and aggregations concerning all spheres of Government;

      (q)   maintaining compatible, effective, efficient and transparent financial management information system;

      (r)   ensuring compliance, by officers with the provisions of this Act; and

      (s)   providing advice and guidance on all matters relating to accounting policy and general financial management;

      (t)   monitoring and inspecting the operations of the de-centralised accounting units in ministries and departments to ensure value for money;

      (u)   providing a regulatory framework for sound financial management to accounting units; and

      (v) carrying out such other functions as may be considered necessary for proper financial management of the Republic.

7.   Controlling officers

   (1) The Secretary to the Treasury shall designate in respect of each head of revenue or expenditure provided for in any financial year, an officer who shall be a controlling officer.

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