NATIONALTREASURY REPUBLIC OF SOUTH AFRICA

Private Bag X115, Pretoria, 0001 Tel: +27 12315 51t1, Fax: +27 12 315 5234

Enquiries:

J SOOBRAMANIAN

Ref:

3/4/3/2/10

Tel: 315c5336

Fax:

326-5445

e.mail:

jeyrel.soobramanian@treasury.gov.za

TO ALL ACCOUNTING OFFICERS: NATIONAL DEPARTMENTS HEADS: PROVINCIAL TREASURIES CHIEF FINANCIAL OFFICERS: PROVINCIAL DEPARTMENTS CHIEF EXECUTIVE OFFICERS / CHIEF FINANCIAL OFFICERS: CONSTITUTIONAL INSTITUTIONS / PUBLIC ENTITIES Supply Chain Management Office EXEMPTIONS FROM SUPPLY CHAIN MANAGEMENT FRAMEWORK This circular is applicable to all national and provincial departments, constitutional institutions and public entities as defined in schedule 3A and 3C of the Public Finance Management Act (PFMA). All accounting officers of national departments and heads of provincial treasuries are required to disseminate the contents of this circular to all chief financial officers of departments and public entities that fall under their jurisdiction. 1 The National Treasuryhas,throughits monitoring process, takennoteofthe progress madeby institutions in theimplementation of supply chainmanagement. Accounting officers / authorities areto becomplimented forimplementation ofthesupply chainmanagement reforms, Thisofficeis, however, receiving requests fromsomeinstitutions for exemption fromtheprescripts of the Supply ChainManagement Framework. Thereasons citedfor suchrequests are,among others, institutions regarding theiracquisitions to be insignificant whenconsidering theirsmallbudgets, low staffcomplement andtheimplications of establishing thevarious structures including thedifferent bid committees. In2003,Cabinet approved theintroduction of supply chainmanagement withinthepublic sector witha
.

viewto, among others,promote soundfinancial management and uniformity in all spheres of

government. TheFramework for Supply ChainManagement (Treasury Regulation 16A12) addresses the issueof interim arrangements if a department, constitutional institution or publicentitylacksthe capacity tofullycomply withthesupply chainmanagement regulations.

In so far as the implementation of the principles of the supplychainmanagement policyis concerned,it is the responsibilityof the accountingofficer / authorityof each institutionto work out a detailed implementation plan. Implementation of thesupplychainmanagement systemwas intendedto be with a "phased-instrategy"approach.The measurement of progresson implementation should,therefore, be conducted againstthe implementation plandeveloped bythe institution.

Althoughthe Officeof the AuditorGeneralhas undertaken to monitorand reporton institutions compliance totherequirements of SCMimplementation, theyareaware thatimplementation would take placewitha "phased-in strategy" approach.Theyhave,therefore, agreed to monitor andreporton compliance against theinstitution's internally approved SCMimplementation plan. Practice NoteNumber SCM3 of 2004issued on28August 2004bytheNational Treasury contains a checklist for theimplementation of SCM. Thischecklist maybe usedas a guideto ensure thatyour procedures areincompliance withtheregulatory requirements.
Accountingofficers/authoritiesare,therefore,requested to ensurethat their supplychainmanagement systemformsan integralpartof the institution's financialmanagement andat the sametimeensurethat througha systematicprocess, goodsandservicesaredeliveredto the rightplace,in the rightquantity, withthe rightquality,at the rightcostandat the righttime.
.

~.'/t<

/.1.-

. /.1

'AN BREYTE ACH CHIEF DIREC~: NORMS ANDSTANDARDS

DATE: 2706/05' /DCf.

Js369w