Public Finance Management Act
- Commenced on 8 July 2003
- [This is the version of this document at 31 December 2014.]
- [Note: This version of the Act was revised and consolidated in the Fifth Revised Edition of the Laws of Malawi (L.R.O. 1/2018), by the Solicitor General and Secretary for Justice under the authority of the Revision of the Laws Act.]
Part I – Preliminary
1. Short titleThis Act may be cited as the Public Finance Management Act.
2. InterpretationIn this Act, unless the context otherwise requires—“Appropriation Act” means an Act of Parliament the principal purpose of which is the application of public moneys for such goods and services as are specified in the Act;“bank” means—(a)a financial institution whose operations include the acceptance of deposits subject to withdrawal or transfer by cheque or other means of third party transfer; and(b)any financial institution in Malawi or outside Malawi in which any public money is deposited or kept in accordance with the provisions of this Act, and includes an international financial institution;“Cabinet” means the Cabinet of Ministers appointed in accordance with section 92 of the Constitution;“chief executive” means the head, however called, of a statutory body;“Consolidated Fund” means the Consolidated Fund established by section 172 of the Constitution;“Controlling Officer” means any person appointed by the President who is—(a)the head or principal person in-charge of a Ministry or Department; and(b)charged with a duty to, or who actually does collect, receive, disburse or deal in any way with any public money, or a person who is charged with the purchase, receipt, custody, or disposal of, or the accounting for, any public resources or public securities;“Estimates” means the statements of the proposed public revenues and expenditure in any financial year as approved by the National Assembly through the passing of an Appropriation Act;“expenditure” means the actual payment of moneys by Government, whether requited or unrequited and whether for current or capital transactions;“financial statements” means the financial statements required under Part IX and the Third Schedule;“financial year” means—(a)in relation to the Government and Government financial statements, a period of twelve months ending on 30th June; and(b)in relation to a statutory body, the annual accounting period of the statutory body;“generally accepted accounting practice” means—(a)standards and practices promulgated by the International Federation of Accountants as applicable to Governments and statutory bodies; or(b)if no standard or practice exists, then accounting principles or practices which have the authoritative support of the accounting profession in Malawi or in countries that maintain accounts and records and prepare financial statements similar to the Government of Malawi and its statutory bodies;“Government” means the executive Government of Malawi established under Chapter VIII of the Constitution;“Government agency” or “agency” means an office, entity or instrument of the Government, other than a Ministry, or statutory body;“grants” means—(a)non-repayable receipts from other Governments, international institutions or domestic institutions or individuals; or(b)non-repayable payments made by the Government to other Governments, international institutions or domestic institutions or individuals;“imprestee” means a person in whose hands any public money is placed for expenditure;“internal control” includes the controls adopted to ensure that within Government—(a)revenue is properly assessed and collected;(b)expenditure is validly and correctly authorized;(c)revenue, expenditure, assets and liabilities are properly recorded and accounted for;(d)financial and operating information is accurate and reliable;(e)assets are safeguarded against loss or destruction;(f)public resources are employed and managed in an effective, economic and efficient manner;(g)there is no waste or extravagance with respect to public resources;(h)outcomes or provisions produced are consistent with those specified in an Appropriation Act;(i)relevant Government policies and legislation are being complied with; and(j)there is effective and efficient management of the financial resources of Government;“National Assembly” or “Assembly” means the National Assembly established under Chapter VI of the Constitution;“National Audit Office” means that part of the office of the Auditor General charged with the responsibility of audit;“officer” includes an officer, a contract officer and an employee of the Public Service of Malawi;“outcomes” mean the impacts or consequences for the people of Malawi of the outputs or activities of Government or the results of the outputs produced;“outputs” means the goods and services that are produced by a Ministry or other person or body who receives an appropriation;“personal emoluments” includes salaries, wages, fees, contract payments for the provision of personal services, and taxable allowances, but does not include any payment in the nature of reimbursement for expenses incurred;“public debt” means all liabilities of the Executive Government and other branches of Government, but does not include liability where the Government is trustee for another person, or the liabilities of any statutory body;“public interest” means something that is to the advantage, direct or indirect, of the people of Malawi;“public money” means all money, other than trust money, received by the Government, including all revenue, grants, loans and other moneys, and all bonds, debentures, and any other securities received by, or on account of, or payable to, or belonging to, or deposited with the Government or any Ministry by—(a)any officer of Government in his capacity as such; or(b)any person on behalf of Government;“public resources” means all real or personal property that belongs to or is owned or held by the State or held by any Ministry, agency or other person for and on behalf of the State or the Government;“public securities” means securities representing the investment, or securing the payment, of any public money;“records” means information recorded and kept by any means, and includes all books, accounts, rolls, files, vouchers, receipts, cheques, records, registers, papers, documents, photographic plates, microfilms photostatic negatives prints, tapes, disks, computer reels, diskettes and hard disk, perforated rolls, and any other type of written, printed, copied, magnetic tape, electronic data record or other information whatsoever, and all papers and other records relating to accounting operations and practice or information recorded and kept by any means;“revenue” means all non-repayable Government receipts;“Secretary to the Treasury” means the Principal Secretary having supervision for the time being of the Ministry of Finance;“State” means the independent State of Malawi, established under the Constitution and includes the Government;“statutory body” means a body of persons, whether corporate unincorporated, other than the Reserve Bank of Malawi, established by any written law, and includes a Council established under the Local Government Act, and any corporation or a subsidiary of a corporation where the Government, directly or indirectly—(a)controls the composition of any board of directors of the body; or(b)controls more than fifty per cent of the voting power of the body; or(c)holds more than fifty per cent of any of the issued share capital of the body either directly or through another agency or statutory body (excluding any part of it that carries no right to participate beyond a specific amount in a distribution of either profits or capital);[Cap. 22: 01]“statutory expenditure” means—(a)expenditure which is not subject to the vote of the National Assembly; and(b)expenditure charged on the Consolidated Fund under the provisions of the Constitution or charged on the Consolidated Fund or any other public fund or account by any other written law in which it is expressly stated to be statutory expenditure;“trading revenue” means the revenue received from the supply of goods or services in a contestable environment;“transactions on behalf of the State” or “payments on behalf of the State” means the categories of appropriations listed in section 23 (3) (c), (d) and (e);“Treasury Instructions” means Treasury Instructions issued under section 92;“trust account” means a trust account established under section 41;“Trust Fund” means the Trust Fund established under section 41;“unclaimed money” means unclaimed money defined under section 44;“Vote” means a sum of money authorized to be spent under section 23 (2).
Part II – Responsibility for financial management
3. General responsibilities of the Minister
4. Specific responsibilities of the MinisterThe Minister is responsible for—
5. Minister may delegate powers
6. General responsibilities of Ministers
7. Secretary to the Treasury
8. Specific responsibilities of the Secretary to the TreasuryIn addition to the responsibilities of Controlling Officers set out in section 10 (with the necessary modifications to paragraphs (k) and (o) in subsection (1)), the Secretary to the Treasury is responsible for—
9. Secretary to the Treasury may delegate powers
10. Responsibilities of Controlling Officers
11. Access to information
Part III – Economic, fiscal and financial policy
12. Principles of responsible fiscal management
13. Generally accepted accounting practiceFinancial reports, financial statements, associated information and accounting procedures required by this Act shall be in accordance with generally accepted accounting practice.
14. Economic and fiscal policy statement
15. Budget policy statement
16. Fiscal strategy
17. Economic and fiscal update
18. Economic and fiscal data
19. Reporting requirements
20. Provision of relevant informationEvery Controlling Officer and the head of every agency of Government shall provide to the Secretary to the Treasury such relevant information, as may be in his possession, that will assist the Secretary to the Treasury to produce the economic and fiscal data and reporting information required under this Part.
Part IV – Parliamentary appropriation and budget
22. Form of the EstimatesThe Estimates shall include the following information in respect of each Vote—
23. Appropriation required
24. Adjustment for unforeseen expenditure
25. Transfer between outputs
26. Approval of Appropriation BillUpon an Appropriation Bill receiving the assent of the President, the Secretary to the Treasury shall make funds available to the respective votes according to the cashflow forecasts agreed between the head of the entity responsible for the Vote and the Secretary to the Treasury, and if agreement cannot be reached, as approved by the Minister.
27. Charge for supply of goods or servicesSave as expressly otherwise provided in any other written law, a Ministry may, with the approval of the Minister, charge for the provision of goods or services:Provided that, if the recipient of the goods or services is another Ministry, there is a prior agreement to charge the costs incurred to an output of the recipient Ministry.
Part V – Public money and the consolidated fund
28. Consolidated Fund
29. Development Fund
30. Treasury Funds
31. Dealing with public money
32. Banking business of the Government
33. Banks to furnish statements
34. Overseas imprests and other accounts
35. Balances may be invested
36. Temporary transfers from one fund to the other
38. Remission or refund of revenue
39. Refunds and corrections
Part VI – Trust moneys and unclaimed money
40. Trust money
41. Establishment of a Trust Fund and trust accounts
42. Operation of trust accounts
43. Investment of trust account money
44. Unclaimed money interpretationIn sections 44 to 53, unless the context otherwise requires— “holder” includes—
45. Period after which money becomes unclaimedThe following money deposited in any bank (including any savings bank) shall become unclaimed money within the meaning of this Act at the following times, whether or not it has at any prior time become payable, namely—
46. Register to be kept
47. Holder to notify Secretary to the Treasury and owner of entryNot later than l5th July in each year, or such later date as the Secretary to the Treasury approves in writing, every holder shall—
48. Payment of unclaimed money to the Consolidated Fund
49. Unclaimed trust money
50. OffencesIf any default is made in complying with sections 46, 47 or 48, the holder, and every director, manager, secretary, and other officer of the holder who knowingly and willfully authorizes and permits the default, shall be liable to a fine of K50,000 for every day during which the default continues.
51. Examination of accounts
52. Secretary to the Treasury may make payment to claimantIf any claimant makes any demand on any unclaimed money within six years of its having been paid to the Consolidated Fund under section 48, the Secretary to the Treasury, on being satisfied that the claimant is the owner of the money demanded by him, shall order and direct payment of the money to be made to him and the payment shall be statutory expenditure.
53. Responsibility to second claimantWhere any unclaimed money paid to a claimant is afterwards claimed by another person, the Secretary to the Treasury shall not be responsible for the payment of the amount, but that person may have recourse against the claimant to whom the Secretary to the Treasury has paid the unclaimed money.
Part VII – Borrowing, loans and guarantees
54. Government not to borrow except under an ActThe Government may only borrow in accordance with this Act and under an Act authorizing it to do so.
55. Instrument of loan agreementEvery loan under this Part shall be in the name of the Republic of Malawi, and every document required to be signed evidencing the terms of the loan shall be executed by the Minister or by any other person authorized in writing by the Minister.
56. Minister may borrow when authorized
57. Provisions for general borrowing
58. Subsidiary loan agreementThe Minister may on-lend loan to another body, including a statutory body, under a written subsidiary loan agreement, such amounts of money on such terms and conditions as are specified in the subsidiary loan agreement.
59. Borrowing on overdraft
60. Treasury Bills
61. Borrowing by stocks, bonds or promissory notes
62. Liability of the StateThe Government shall not be liable to contribute towards the payment of any debt or liability of the State unless the State is liable to contribute under any other written law, or is, liable to contribute under any guarantee or indemnity given under section 63, or is liable to pay to any creditor.
63. Power to give guarantees and indemnities
64. Taking and releasing of securities by the State
65. Expenditure for protection of public securities
66. Power to lend moneySubject to section 23, where it is in the public interest to do so, the Minister may on behalf of the State, on terms and conditions approved by the National Assembly, lend money to any organization whether within or outside of Malawi.
Part VIII – Statutory bodies
67. Application of this Part
68. Performance, management plan and budget
69. Financial activities
70. Bank accounts
71. Moneys payable to statutory bodiesWhere money is appropriated by the National Assembly for the purposes of a statutory body, such money shall be payable at such times and in such amounts as the Secretary to the Treasury determines.
72. Private loans
73. Borrowing on overdraft by statutory bodyA statutory body may, with the prior written approval of the Minister, borrow for its purposes, by overdraft, within such limits as the Minister approves, and there shall be no liability attached to the State or Government by virtue only of the approval of the Minister.
76. Application of resourcesThe resources of a statutory body may be applied only for the purposes specified in its empowering Act, this Act or otherwise lawfully conferred on the body.
77. Contracts for works, supplies and servicesA statutory body may enter into contracts for the works, acquisition, disposal or management of goods, services and construction works in accordance with the provisions of the Public Procurement Act.[Cap. 37: 03]
78. Accounts and records
79. Reports and financial statements
80. Powers of inspection of the Secretary to the Treasury
81. Payment of surplus funds to Consolidated Fund
82. Investments in corporations other than statutory bodiesDetails of investments in corporations in which the Government owns a shareholding but are not otherwise deemed to be a statutory body shall be disclosed in the financial statements in accordance with section 83.
Part IX – Financial reporting
83. Financial statements
84. Quarterly summaries and monthly reporting
85. Details to be included in quarterly and monthly statements
86. Annual reports
Part X – Offences and discipline
87. Disciplining of Controlling Officers and chief executives in certain circumstances
89. Obligation to report
Part XI – Miscellaneous provisions
90. Write-off of losses
91. RegulationsThe Minister may make such regulations as are deemed necessary or expedient for the purpose of giving full effect to this Act and for the due administration of this Act, and in general for the better control and management of public money and public resources and, without limiting the generality of this section, such regulations may include the following matters—
92. Treasury Instructions
93. Transitional provisions
94. This Act to prevailWhere any provision of this Act conflicts with a provision of any other written law, other than the Constitution, the provisions of this Act shall prevail.
95. Repeals and savings
History of this document
08 July 2003