Home-grown technology offers fix for government spending woes

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Inadequate or ineffective financial controls have been a serious problem in many national and provincial government departments, with the Auditor General repeatedly highlighting problems of overspending, inappropriate or fruitless spending and underspending. The solution, according to Fraxion MD Stanton Jandrell, is to automate the financial management process as far as possible to enforce compliance without adding to red tape and compromising service delivery.

"The Departments of Home Affairs and Correctional Services have received qualified audits every year, with several other departments receiving three or more qualified audits in a row," Jandrell told Smart Procurement.

"Delivery of essential public services has been compromised as a result."

"The culprits", he says, "are scarce financial management skills and inadequate checks and balances. The Public Finance Management Act (PFMA) has excellent provisions, but many departments find them very onerous and time-consuming to implement, so they aren't working."

"An automated spend management system can eliminate fruitless expenditure, improve procurement decision making processes and enable tight auditing and tracking of expenditure." "That will help departments to spend to budget and deliver on their mandates. Under-spending is as much of a problem as over-spending."

"The key", he says, "is that a spend management needs to cover all spending activities, from capital expenditure through procurement to travel and entertainment expenses."
"That should include the process of taking on and approving new suppliers, to reduce the potential for conflicts of interest."

"Our solution offers government department's comprehensive financial control with minimal disruption to existing business processes. "We're simply automating PFMA elements that are currently manual," he says. 

"The goal is a transparent, efficient system that makes compliance with PFMA easy and watertight."

Fraxion's Spend Management Solution, developed in South Africa has already implemented in companies around the world including JP Morgan, American Express and Total. The company has been named Most Noteworthy Achiever in the in the 2006 Emerging Technology Top 100 Awards.

Editorial details Fraxion Stanton Jandrell  Cell: 082 940 6220 Email: stantonj@fraxion.biz

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