Abstract:
A budget is a key element that indicates whether an institution will be able
to achieve its aim. The budget management process is inseparable from
performance management and the focus should not only be on expenditure
control, but also on the achievement of objectives. The objective of
budget reform should therefore be to enable management to measure and
enhance a department’s performance. Performance management in the
environment of public financial management in South Africa is no longer a
foreign concept. Performance management systems have evolved to secure
a higher degree of service delivery in respect of effectiveness, efficiency,
economy, and appropriateness.
Since 1997 the South African public service has been moving towards
the utilisation of performance management as a requirement for the
executive authority of a department to determine a system of performance
management and development for employees. Senior managers are also
required to enter into performance agreements with the executive authority
of their department. The importance of performance management for
senior managers in terms of financial management is illustrated by the
fact that a performance agreement has to be signed with the executive
authority within the first month of the new financial year. This indicates that
performance is directly linked to financial management (budget control)
and the measurement of performance. In view of the importance and the
significant role of performance management, the budget and the budget
process should be further reformed and refined into a mechanism to make the measurement of performance more effective so as to achieve service
excellence.
