Why Governance Matters Most When the Headlines are Quiet
In the wake of high-profile legal and political events, the public focus often shifts to the next news cycle. However, for boards, accounting officers, and risk committees, the real work begins when the “drama” ends. The true measure of an entity’s health is not found in its headlines, but in how it accounts for the costs incurred during times of crisis.
The Technical Test: Categorizing the Cost
Expenditure incurred during significant public events-ranging from legal fees and advisory consultants to large-scale resource deployments-must be scrutinized through the lens of the Public Finance Management Act (PFMA) and Treasury Regulations.
At Altimax, we help decision-makers navigate the fine line between “normal budgeted expenditure” and the more serious classifications that threaten an audit opinion:
- Fruitless and Wasteful Expenditure: Costs made in vain that could have been avoided had reasonable care been exercised.
- Irregular Expenditure: Spending that contravenes applicable legislation or regulations.
- Unauthorised Expenditure: Spending that exceeds the budget or is not in accordance with the mandate of the department.
Beyond Compliance: The Power of Consequence Management
Simply identifying these costs is not enough to ensure peace of mind. True economic value is created through robust consequence management and recovery processes. When an entity is “bold” enough to transparently list these figures, it demonstrates a commitment to governance that builds long-term stakeholder trust.
The question every oversight structure should ask is: Will these costs be hidden in a larger figure and forgotten, or will they be the catalyst for a stronger, more transparent organization?
Your Partner in Public Sector Excellence
Altimax specializes in simplifying the complexity of the PFMA and Treasury Regulations. We serve as your strategic partner to ensure that your financial statements reflect not just what happened, but how your organization is improving its performance and protecting public funds.
Ensure your governance is audit-ready. Schedule a Risk Management Workshop or Request PFMA Compliance Advice to safeguard your entity’s reputation.
