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Revenue management in the public sector plays an important role for achieving the objectives of any country, which in turn enhances the economic development and social well being of the society.
The accounting officer for the government department, constitutional institution, public entity, Parliament and provincial legislature is required to manage revenue efficiently and effectively by developing and implementing appropriate processes that provide for the identification, collection, safeguarding, recording and reconciliation of information about revenue.
DEFINITION OF REVENUE MANAGEMENT
What is Revenue Management?
Revenue management involves all the procedures necessary to ensure that the income of government departments is properly planned and fully accounted for, and that cash once received is safeguarded and banked promptly.
REVENUE MANAGEMENT IN TERMS OF THE PFMA
According to the PFMA, the accounting officer must take effective and appropriate steps, to collect all money due to the government department or constitutional institution. An accounting officer is essentially the head of that government department; or the chief executive officer of a constitutional institution.
Responsibilities of the Accounting Officer in relation to Revenue Management
• The accounting officer of an institution must manage revenue efficiently and effectively.
• The accounting officer must further develop and implement appropriate processes that provide for the identification, collection, safeguarding, recording and reconciliation of information about revenue.
• This essentially means that the accounting officer must plan for future income levels including identifying potential or actual sources of revenue and reviewing all fees, charges, rates, and tariffs, at least annually.
• The accounting officer must also ensure that revenue and cash resources are safeguarded by transferring such cash into the government bank accounts promptly and improving the security around the handling of cash.
• The accounting officer must ensure that the revenue collected is reconciled and recorded in the government accounting system.
REVENUE ENHANCEMENT
Revenue enhancement is the practice of increasing revenue within an institution or organization by improving various measures and processes which involve and support revenue collection, revenue protection, revenue reporting and revenue management as a whole.
In order to enhance and improve revenue for their departments or organizations, Accounting Officers may introduce the following Revenue Enhancement Strategies:
- Ensuring that they understand the revenue management value chain of the department.
- Identifying the risks and weaknesses in each activity within revenue management value chain.
- Improving service delivery.
- Introducing a culture of Good Governance Developing; and
- Implementing sound financial management practices
CONCLUSION
PFMA requires that an accounting officer must manage revenue efficiently and effectively by developing and implementing appropriate processes that provide for the identification, collection, safeguarding, recording and reconciliation of information about revenue.
Revenue management processes must also ensure adequate separation of duties and provide for effective supervision and monitoring of revenue collected.
List of Reference Used:
1.
www.parliament.gov.za/storage...
2. www.treasury.gov.za/legislatio...
3. oag.treasury.gov.za/publicati...
3. Republic Of South Africa. 1999. Public Finance Management Act 1 Of 1999.
www.treasury.gov.za/legislatio...
4. www.treasury.gov.za/legislatio...
5. Tiwari, P. (2017). Assessing Factors Affecting Revenue Management in Public Sector: The Case of Halaba Special Woreda Town Administration Ethiopia (SNNPR). IRA-International Journal of Management & Social Sciences (ISSN 2455-2267), 6(2), 188-234. doi: dx.doi.org/10.21013/jmss.v6.n2.p6
Disclaimer:
This publication and the information included in it are not intended to serve as a substitute for consultation with a professional. Specific issues, concerns and conditions always require the advice of an appropriate professional advisor. The use of the contained information is at the user's own discretion.