Financial and Fiscal Commission. Strategic Plan 2011/ /2014

Transcription

1 Financial and Fiscal Commission Strategic Plan 2011/ /2014 Standing Committee on Finance April 2012

2 Key Commission Focus Areas for 2011/2012 Financial Year Providing evidenced-based policy advice on Intergovernmental Financing Innovation for Moving People out of Poverty under the following subthemes: Supporting Inclusive Growth: Jobs, Knowledge and Regional Development Climate change and environmental sustainability: Opportunities and risks for inclusive growth and innovation Institutional development for inclusive growth and innovation Recommendations to be tabled as part of Commission 2013/2014 Submission for the Division of Revenue Responding to outcomes of Stakeholder Perception Survey and Impact Assessment (Role and Mandate of Commission; Commission Profferings and their value-add) Public Hearings on Local Government Fiscal Framework and Housing Financing in October 2011 based on draft Problem Statement tabled by Commission Second set of Public Hearings in current Financial Year to present an options Reduction of legacy R3.4m Deficit Injection received from National Treasury 2

3 Key Commission Challenges for 2011/2012 Financial Year Burden carried by Commission under significant resource constraint\ 3 Vacant Commission posts some since June 2008 Restricted levels of depth and breath in expertise, strategic approach, research as well as oversight because of vacancies Uncertainty due to absence of substantive Chairperson of the Commission Burden carried by Acting Chairperson/CE as sole Executive Commissioner and also Chief Executive of the Commission Commissioner Ajam has played a supportive role Absence of Engagement Protocols to guide the interaction between Parliament and the Commission Resource implications of the implementation of the Money Bills Procedures and Related Matters Act 3

4 Part I Financial and Fiscal Commission Corporate Strategy

5 Mandate of the Commission The Commission is established in terms of Section 220 of the Constitution of the Republic of South Africa Act No. 108 of 1996 as amended The Constitution provides among others that the Commission is an independent and impartial advisory institution to Parliament, provincial legislatures, organised local government and other organs of state on the division of revenue among the three spheres of government Any other financial and fiscal matters 5

6 Enabling Legislation The Intergovernmental Fiscal Relations Act No. 97 of 1997 as amended The Financial and Fiscal Commission Act No. 99 of 1997 as amended The Municipal Systems Act No. 32 of 2000 as amended The Provincial Tax Regulation Process Act No. 53 of 2001 as amended The Municipal Finance Management Act No. 56 of 2003 as amended The Intergovernmental Relations Framework Act No. 13 of 2005 as amended The Municipal Fiscal Powers and Functions Act No. 12 of Money Bills Amendment Procedures and Related Matters Act No. 9 of

7 Commission consists of: Composition Full time Chairperson and Deputy Chairperson (national nominees) Chairperson also the Chief Executive and Accounting Officer Seven other Commissioners (two national, three provincial and two local nominees) All appointments are made by the President of the Republic Current Vacancies : Chairperson: Term expired end of August 2010 and Deputy Chairperson acting since (21 months) Local Government nominee: Vacant since July 2009 (33 months) National Government Nominee: Vacant since July 2009 appointee never took up position and resigned February 2011 (33 months) 7

8 Vision To enhance the developmental impact of public resources through the financial and fiscal system in South Africa Mission To provide proactive, expert and independent advice on promoting a sustainable and equitable IGFR system, through the formulation and collation of policy relevant analysis, in order to realise the values of the Constitution

9 Strategic Goals: 2011/ /2014 The following are the major strategic goals or key focus areas of the Commission: 1. A stable IGFR System: The system of Inter-governmental Fiscal Relations (IGFR) is sustainable and equitable 2. Strategic foresight: No surprises and future-oriented 3. Sound and informed policy advice: Effective policies that are evidence-based result from comprehensive and value-added engagement 4. Knowledge management: Relevant knowledge that enhances developmental impact is created and mobilised through the balance of internal and external specialist talent commensurate with the needs of the Commission 5. Success culture: A dynamic, productive organisational culture is created and nurtured 6. Balance: The balancing of present and future demands, leading to effective performance within the constraints of available resources 9

10 How Are We Doing? 2011/2012 Achievements Strategic Goal 1: A stable IGFR System Participated in the Strategic Planning Processes of Standing Committee on Appropriations and Oversight Functions of Parliament Finance, Appropriations, Energy, Health, Economic Development, Women, Children and Disabled, COGTA, Human Settlements; Participated in the activities of the technical committees of finance Strategic Goal 2: Strategic foresight Commission is part of the institutions at the fore front of research into issues of innovation, climate change and the green economy; monitored the impact of fiscal consolidation and financial management concerns at provincial (i.e. interventions) and local level (sustainability), Commission is also participating in the long term fiscal sustainability studies that government is currently carrying out. 10

11 How Are We Doing? 2011/2012 Achievements Strategic Goal 3: Sound and informed policy advice Released Technical Report that supports Commission 2012/2013 Submission for the Division of Revenue Strategic Goal 4: Knowledge management Developed unique models : Land Use Cost Model, Econometric Models on the National and Provincial Economy, Energy focused macro-model. Maintain Province and Municipality datasets and preserved for future use Dissemination of Commissions work through workshop to parliamentary committees, public hearings and media reports. 11

12 How Are We Doing? 2011/2012 Achievements Strategic Goal 5: Success culture Published in accredited international and national journals Produced book chapters, technical reports, occasional papers, conference papers and working papers Strategic Goal 6: Balance Expenditures within variance limits prescribed by Auditor General Balance of in-house and outsourced capacity 12

13 Enhanced developmental impact of public resources through the financial and fiscal system in South Africa system in South Africa Proactive, expert and independent advice provided on promoting a sustainable and equitable IGFR system. Effective and efficient secretariat support compliant with the relevant legislation Stakeholders value and act upon policy advice to realise the values of the Constitution Quality, innovative policy-relevant research conducted Effective management of research project portfolio in line with Research Strategy Coordinated, costeffective knowledge, and information management Effective packaging and dissemination of policy advice Stakeholders intensively engaged on key IGFR policy decisions Domestic and international partnerships, networking and collaboration Human Resource management that attracts, develops and retains talent, and leverages external expertise Good, responsible, ethical leadership and management Good practice corporate governance compliant with legislation Accountable, transparent financial management Coordinated, cost effective asset management 13

14 How Are We Doing? Deliverables Tabled 2012/2013 Submission for the Division of Revenue Briefed Parliament, Provincial Legislatures (except the Western Cape Provincial Legislature), SALGA and Government on the 2012/2013 Submission for the Division of Revenue Submission on 2011 Medium Term Budget Policy Statement Submission for the Division of Revenue and 2012/2013 Division of Revenue Bill Submission and briefed Parliament and Provincial Legislatures on 2012/2013 Division of Revenue Bill Submission and briefing Parliament on 2012/2013 Fiscal Framework and Revenue Proposals Submission on and briefing Parliament on 2012 Appropriations Bill 14

15 How Are We Doing? Deliverables: Submission on Siyenza Manje Project for Select Committee on Finance Submission on Green Paper on Cooperative Governance for the Department of Cooperative Governance Submission on Fuel Levy Allocations for the Department of Energy and National Treasury Submission on MISA Strategy for the Department of Cooperative Governance Submission on the Spatial Planning and Land Use Management Bill for the Department of Rural Development and Land Reform Submission on the 2011 Amendment to the Municipal Systems Act for the Department of Cooperative Governance Submission on the 2011 Municipal Property Rates Amendment Bill for National Treasury 15

16 How Are We Doing? Deliverables cont... Conducted Analysis of Local Government Revenue and Expenditure: The Case of Free State Municipalities for Free State Provincial Legislature Submission on ethekwini Metropolitan Municipality Application for Local Business Tax for National Treasury 16

17 How Are We Doing? 2011/2012 Research Overall Theme o Intergovernmental Financing Innovation for Moving People out of Poverty Sub-themes o A. Supporting Inclusive Growth: Jobs, Knowledge and Regional Development Fostering and anticipating new areas of growth Employment progression, the better utilisation of skills and improving the quality of local jobs Building adaptability and progression Good local governance for job creation 17

18 How Are We Doing? Research cont... o B. Climate change and environmental sustainability: Opportunities and risks for inclusive growth and innovation Disaster management Waste management Climate change and rural economy o C. Institutional development for inclusive growth and innovation Alternative service delivery arrangements Capacity dynamics in the Local Government sphere Gender budgeting Impact of revenue and expenditure assignment on economic growth 18

19 Part II Strategic Objectives and Annual Performance Plan

20 Strategic Objectives 2011/2014 Stakeholder Internal Business Processes Learning and Innovation Financial To profile the Commission with a special focus on the Commission s Mandate, Vision, Mission and Role, the Commission s Short- and Long- Term Strategy, the Commission s position on specific issues, the Commission s Challenges and Achievements To ensure the progressive and innovative management of human resources that attracts, develops and retains key talent, and leverages external expertise To ensure the creation of new knowledge, the institutionalization of such knowledge and its transfer to other role players within the intergovernmental fiscal relations system To ensure prudent and transparent management of the financial resources of the Commission To ensure that Commission research is converted to policy advice and recommendations written in a language that is accessible to policymakers To ensure the coordinated, coherent, high-quality, innovative and costeffective approach to ICT that meets the needs of the Commission, the Commission Secretariat and stakeholders To ensure the coordinated, costeffective and innovative acquisition and management of Commission data, information and knowledge resources in support of delivery on the Commission s mandate To ensure access to alternative sources of funding To ensure that policy advice and recommendations respond to the needs of stakeholders To ensure the coordinated, costeffective and innovative management of Commission assets in support of delivery on the Commission s mandate To ensure the generation of quality, innovative, pioneering research that informs key IGFR strategic debates and choices To ensure compliance with legislation and adherence to relevant corporate governance best practice. To produce evidence-based results To ensure effective and responsible leadership with specific focus on integrity, transparency and accountability, as well as on the development a positive organisational culture. 20

21 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To profile the Commission with a special focus on the Commission s Mandate, Vision, Mission and Role, the Commission s Short- and Long-Term Strategy, the Commission s position on specific issues, the Commission s Challenges and Achievements Target Status Target 2011/ / /2013 Indicator 1: Dissemination and clarification of outputs to a wider audience Website upgrade, Social Media presence and engagement with other Parliamentary Committees in addition to Finance Committees Achieved 14 Committees. Government briefing. Website upgrade. Twitter, Facebook and LinkedIn presence. 8 Provincial Legislatures. SALGA Website and Social Media enhancement; 18 Parliamentary Committees, 9 Provincial Legislatures; Government; and Organised Local Government 21

22 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To profile the Commission with a special focus on the Commission s Mandate, Vision, Mission and Role, the Commission s Short- and Long-Term Strategy, the Commission s position on specific issues, the Commission s Challenges and Achievements Target Status Target 2011/ / /2013 Indicator 2: Stakeholder instruction on IGFR and IGFR issues 2 Stakeholder IGFR Workshops Partially achieved. Standing Committee on Appropriations. Gauteng Legislature cancelled because of tolling protests. Indicator 3: Relationship building and consultation 2 Stakeholder IGFR Workshops 2 Protocols of Engagement Not achieved. 6 pending 2 Protocols of Engagement 2 Public Hearings Achieved 2 Public Hearings 22

23 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To profile the Commission with a special focus on the Commission s Mandate, Vision, Mission and Role, the Commission s Short- and Long-Term Strategy, the Commission s position on specific issues, the Commission s Challenges and Achievements Target Status Target 2011/ / /2013 Indicator 4: Collaboration and partnership 2 Memoranda of Understanding with partners Achieved HSRCSA and FANRPAN 2 Memoranda of Understanding with partners 23

24 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure that Commission research is converted to policy advice and recommendations written in language that policymakers can understand Indicator: Clear language edited Submissions, Reports and Policy Briefs Target Status Target 2011/ / /2013 Submission on Division of Revenue Bill, Submission on Fiscal Framework and Revenue Proposals, Submission on Appropriations Bill, Annual Submission on Division of Revenue, Annual Report, Submission on Medium Term Budget Policy Statement, Section 3(2)(b)(i) and (ii) of the Financial and Fiscal Commission Act Submissions, and Policy Briefs Achieved Submission on Division of Revenue Bill, Submission on Fiscal Framework and Revenue Proposals, Submission on Appropriations Bill, Annual Submission on Division of Revenue, Annual Report, Submission on Medium Term Budget Policy Statement, and Section 3(2)(b)(i) and (ii) of the Financial and Fiscal Commission Act Submissions and Policy Briefs 3. To ensure that policy advice and recommendations respond to the needs of stakeholders Indicator: Attendance at stakeholder forums Representation and participation where applicable at State of the Nation Address; Budget Speech; Budget Lekgotla, Council and Forum; MinMecs; Technical Committees on Finance; Parliamentary, Provincial Legislature and Local Government House and Committee Hearings, Workshops and Planning Sessions Achieved Representation and participation where applicable at State of the Nation Address; Budget Speech; Budget Lekgotla, Council and Forum; MinMecs; Technical Committees on Finance; Parliamentary, Provincial Legislature and Local Government House and Committee Hearings, Workshops and Planning Sessions 24

25 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the generation of quality, innovative, pioneering research that informs key IGFR strategic debates and choices Target Status Target 2011/ / /2013 Indicator 1: Peer-reviewed publications in an accredited journals Number of articles published by Commission researchers during period under review (13.6) Partially achieved (11.6). Staff movements Indicator 2: Recognised book chapters or working papers or technical reports published Number of book chapters, technical reports, occasional papers, conference papers and working papers with Commission researchers listed as authors or co-authors (22) Achieved Number of articles published by Commission researchers during period under review (13.6) Number of book chapters, technical reports, occasional papers, conference papers and working papers with Commission researchers listed as authors or co-authors (22) Indicator 3: Number of Commission research datasets/model codes/syntax archived for future use Number of unique datasets developed and preserved for future use (22) Achieved Number of unique datasets developed and preserved for future use (22) 25

26 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the progressive and innovative management of human resources that attracts, develops and retains key talent, and leverages external expertise Target Status Target 2011/ / /2013 Indicator 1: Organisational Development (OD) Restructuring of Commission delivery model Not achieved. Resource constraints. Indicator 2: Updated human resource management policies and procedures Review of Protected Disclosures Policy, Health and Safety Policy and Policy, and development of Employee Assistance and Employee Wellness Programmes Policies and Procedures Achieved Indicator 3: Performance Management that is fair, equitable and consistent Restructuring of Commission delivery model Review of Performance Management System and Policy 20% SMS and 25% MMS receive performance bonus Achieved 20% SMS and 25% MMS receive performance bonus 26

27 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the progressive and innovative management of human resources that attracts, develops and retains key talent, and leverages external expertise Target Status Target 2011/ / /2013 Indicator 4: Minimum level of unoccupied but budgeted posts Less than 15% of budgeted but vacant posts Achieved. Less than 15% of budgeted but vacant posts Indicator 5: Reward and recognition of staff in terms of Commission Policy Remuneration of staff not below levels prescribed by DPSA Indicator 6: Minimum level of absenteeism Achieved Remuneration of staff not below levels prescribed by DPSA Less than 5% Achieved Less than 5% Indicator 7: Maintenance of acceptable levels of misconduct and discipline Less than 3% of total staff compliment Achieved Less than 3% of staff compliment Indicator 8: Targeted training and development as per organisational training and development plan At least three (3) days per employee Achieved At least three (3) days per employee 27

28 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the progressive and innovative management of human resources that attracts, develops and retains key talent, and leverages external expertise Target Status Target 2011/ / /2013 Indicator 9: Maximised Gender balance SMS 60 male/40 female; MMS 60 male/40 female; Organisational 60 male/40 female Not achieved. SMS 60 male/40 female; MMS 60 male/40 female; Organisational 60 male/40 female 7. To ensure the coordinated, coherent, high-quality, innovative and cost-effective approach to ICT that meets the needs of the Commission, the Commission Secretariat and stakeholders Indicator 1: ICT Strategy and revised ICT Policies and Procedures Approved ICT Strategy, Policies and Procedures Partially achieved. ICT Strategy and Business Continuity Plan in place Review of all ICT Policies and Procedures 28

29 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the coordinated, coherent, high-quality, innovative and costeffective approach to ICT that meets the needs of the Commission, the Commission Secretariat and stakeholders Target Status Target 2011/ / /2013 Indicator 2: Upgraded ICT Infrastructure (Hardware and Software) Retirement of pre-2007 infrastructure per plan Indicator 3: Streamlined ICT Network and Connectivity Partially achieved. Second server and copier replacement finalised. Backups in place Retirement of outstanding pre-2007 infrastructure per plan Reconfiguration of ICT Network and connectivity Partially achieved. Audit finalised. Appointment of new service provider and rollout of network 29

30 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the coordinated, coherent, high-quality, innovative and costeffective approach to ICT that meets the needs of the Commission, the Commission Secretariat and stakeholders Target Status Target 2011/ / /2013 Indicator 4: Proactive and efficient maintenance of ICT hardware and desktop support to users Appointment of service provider Achieved. Service provider appointed Less than 8 hours downtime 8. To ensure the coordinated, cost-effective and innovative management of Commission assets in support of delivery on the Commission s mandate Indicator 1: Review and implement Facilities Management Policies and Procedures Review Travel Policy, Asset Management Policy and Telephone Usage Policy Partially achieved. Audit finalised. Appointment of new service provider and rollout of network 30

31 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the coordinated, cost-effective and innovative management of Commission assets in support of delivery on the Commission s mandate Target Status Target 2011/ / /2013 Indicator 2: Asset Management and utilization Plan (Fixed and Movable Asset Registers) Develop asset management and utilisation plan Partially achieved. Asset register revised Approve and implement asset management and utilisation plan Indicator 3: Minimum year-round maintenance requirements for assets as per Commission Maintenance Plan Develop asset maintenance plan Partially achieved. Useful life audit finalised Approve and implement asset maintenance plan Indicator 4: Office Space commensurate with Commission resources and requirements Reduce Midrand Office Space by 42% Reduce Cape Town Office Space by 50% Partially achieved Midrand: DPW delays Cape Town: Lease expires January 2013 Reduce Midrand Office Space by 42% Reduce Cape Town Office Space by 50% 31

32 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure compliance with legislation and adherence to relevant corporate governance best practice. Target Status Target 2011/ / /2013 Indicator 1: Comply with legislated advisory requirements by responding in writing to written requests for advice Comply with stakeholder requests for advisories and comment Achieved Comply with stakeholder requests for advisories and comment Indicator 2: Table Annual Report to Parliament, provincial legislatures and organised local government September 2011 Achieved September 2012 Indicator 3: Conduct of Commission business in accordance with the law, the Commissions Codes of Governance, the Commission s Policies and Procedures, and best practise Comply with the law, policies and best practise Achieved Comply with the law, policies and best practise 10.To ensure effective and responsible leadership with specific focus on integrity, transparency and accountability, as well as on the development a positive organisational culture Indicator: Performance Reviews and Assessments Quarterly performance reviews Achieved Quarterly performance reviews 32

33 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the creation of new knowledge, the institutionalization of such knowledge and its transfer to other role players within the intergovernmental fiscal relations system Target Status Target 2011/ / /2013 Indicator 1: File Plan for electronic and paper-based documents Syntax and Terms of Reference for File Plan Achieved Develop File Plan for approval by National Archives Indicator 2: Active documentation of experiences Develop Records Management Policies Achieved Approval and implementation of Records Management Policies Indicator 3: Capture, storage and sharing of knowledge presented in the form of documents Digitisation of paper records Not achieved. Resource constraints Digitisation of paper documents 33

34 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the coordinated, cost-effective and innovative acquisition and management of Commission data, information and knowledge resources in support of delivery on the Commission s mandate Target Status Target 2011/ / /2013 Indicator 1: Collection Development Manual Revise library and knowledge management strategy and policies, and collect development manual Indicator 2: Access to virtual resources Partially achieved Approve revised library and knowledge management strategy and policies, and collect development manual Secure and maintain Wizcat access Achieved Secure and maintain Wizcat access Indicator 3: Library Materials Exchanges Secure reference materials on loan from partner institutions Indicator 4: Memoranda of Understanding Achieved Secure reference materials on loan from partner institutions Conclude and maintain memoranda of understanding on exchanges with partner institutions Achieved Conclude and maintain memoranda of understanding on exchanges with partner institutions 34

35 Stakeholder Engagement Strategic Objectives and Key Performance Indicators 2011/ / To ensure the coordinated, cost-effective and innovative acquisition and management of Commission data, information and knowledge resources in support of delivery on the Commission s mandate Indicator 5: Reference Books Target Status Target 2011/ / /2013 Cost effectively acquisition of at least 4 reference books Achieved Cost effectively acquisition of at least 4 reference books 12.To ensure prudent and transparent management of the financial resources of the Commission Indicator 5: A clean audit Unqualified Audit Opinion with matters of emphasis Pending Unqualified audit opinion without matters of emphasis 13. To ensure access to alternative sources of funding At least 5% of budget allocation Not achieved At least 5% of budget allocation 35

36 2009/2014 Research Strategy: Components and Programmes Equitable Growth Paths and Distribution of Public Resources Macroeconomic analysis Growth, Poverty and Inequality Revenue sharing among and within government spheres vertical and horizontal divisions Progressive Realisation Sustainable Development Infrastructure, services, social welfare (impact on vulnerable groups) Environmental economics, including green economy Knowledge Economy Accountable Institutions (at the different spheres and layers of government) Taxation and other revenue sustainability options Expenditure diversification Institutions running these and fiscal accountability 36

37 2009/2014 Research Strategy: Components and Programmes cont... Stakeholder Requests (flexible/ad hoc) Legislation proposals with a financial and fiscal impact Other unforeseeable referrals 37

38 2012/2013 Thematic Focus and Research Projects 2012/2013 Thematic Focus Levers to Unlock Value for Decadal Development: People, Places, Institutions and the Economy 2012/2013 Research Projects Analysing Child Support Grants using Economy-wide Models Framework and Tools for Understanding Green Job Creation in South Africa Budget Consolidation in South Africa: A Disaggregated Approach The Effects of Social Spending on Economic Activity in South Africa Short-term Forecasting Model for South Africa Dynamics and Implications of Provincial Personnel Expenditure on Service Delivery Harnessing Informality into the Main Stream of Humans Settlements Delivery in South Africa Evaluation of Public Transport Operating Subsidies in South Africa Devolution and Delivery of Transport Infrastructure: Intergovernmental Implications for Municipalities 38

39 2012/2013 Thematic Focus and Research Projects cont... An Integrated Planning Approach to Delivery of School Infrastructure Intergovernmental Dynamics of Sub-national Government Budget Gaps and Implications for South Africa s Fiscal Health An Outcomes Based Approach to Service Delivery in a Decentralized System of Government Conditional Grant Performance Assessment Incentives For Rewarding Performance in the Public Sector Challenges, Constraints and Best Practices in Rehabilitating Water and Electricity Distribution Infrastructure Understanding the Dynamics of the Tax Bases of Rural Municipalities and the Constraints in Raising Revenue in these Areas Determinants of Performance of Municipalities in South Africa: A Cross Sectional Analysis Budget Reforms of the Health Conditional Grants and Strengthening of Health Performance The Impact of No Fee Schools Policy on Equity, Funding and Learner Performance 39

40 2012/2013 Thematic Focus and Research Projects cont... Identifying Gaps and Progress Made with Government Outcomes: A Spatial Approach Fiscal Rules and Long Term Modelling Role of Provincial Governments in Meeting National Priorities Revision of the Division of Revenue Bill Impact of Unfunded Mandates The Role of Intergovernmental Fiscal Relations (IGFR) in Innovation Financing in South Africa Analysing Public Economics of Corruption Fiscal Distress Indices Public Hearings: Local Government Fiscal Framework and Housing Financing 40

41 Relating Expenditure to Strategic Objectives Name of the Objectives Medium-term estimate R Thousand 2012/ / /15 Name of the Objectives 37,268 38,289 40, To ensure the generation of quality, innovative, pioneering research that informs key IGFR strategic debates and choices 18,199 18,545 19,503 Compensation of employees 9,162 10,431 10,862 Use of goods and services 6,962 8,114 8,641 Interest, dividends and rent on land Transfers and subsidies Other To produce evidence-based results Compensation of employees Use of goods and services Interest, dividends and rent on land Transfers and subsidies Other To ensure compliance with legislation and adherence to relevant corporate governance best practice. 6,230 7,044 7,466 Compensation of employees 4,255 3,305 3,621 Use of goods and services 1,975 3,739 3,845 Interest, dividends and rent on land Transfers and subsidies Other 4 Prudent and transparent management of financial resources 4,285 3,993 4,232 Compensation of employees 2,471 2,110 2,236 Use of goods and services 1,314 1,883 1,996 Interest, dividends and rent on land Transfers and subsidies Other 41

42 Relating Expenditure to Strategic Objectives Name of the Objectives Medium-term estimate R Thousand 2012/ / /15 Name of the Objectives 37,268 38,289 40, To ensure the progressive and innovative management of human resources that attracts, develops and retains key talent, and leverages external expertise 2,478 2,614 2,770 Compensation of employees 1,894 1,997 2,116 Use of goods and services Interest, dividends and rent on land Transfers and subsidies Other To ensure the coordinated, coherent, high-quality, innovative and costeffective approach to ICT that meets the needs of the Commission, the Commission Secretariat and stakeholders 1,276 1,346 1,427 Compensation of employees Use of goods and services 1,029 1,083 1,148 Interest, dividends and rent on land Transfers and subsidies Other To ensure the coordinated, cost-effective and innovative management of Commission assets in support of delivery on the Commission s mandate 4,212 4,127 4,374 Compensation of employees 1,589 1,748 1,923 Use of goods and services 2,009 2,064 2,112 Interest, dividends and rent on land Transfers and subsidies Other Compensation of employees Use of goods and services Interest, dividends and rent on land Transfers and subsidies Other Other Total 37,268 38,289 40,429 42

43 Funding Financial Performance Audited Results Unaudited Current Budget Allocation Description 2001/ / / / / / / / / / / / /14 Government Grant 9,258 12,038 12,679 18,382 19,899 21,705 27,496 26,125 26,580 31,391 33,036 37,268 39,159 Other Income Revenue 9,904 12,286 12,787 18,435 20,107 22,485 27,996 26,365 26,677 31,793 33,196 37,441 39,342 Grant increase % -100% 30% 5% 45% 8% 9% 27% -5% 2% 18% 5.24% 12.81% 5.07% Staff Costs 5,101 5,731 7,191 7,935 8,463 12,759 16,223 15,879 17,641 19,524 19,603 19,604 20,682 Depreciation & Amortisation , ,035 1, Professional Service ,004 3,913 2,501 4,099 4,650 6,589 6,841 Other Operating Expenses 2,812 4,231 6,070 7,392 9,139 11,344 8,248 6,993 6,111 8,445 7,275 8,658 11,263 Interest TOTAL 9,481 11,397 15,273 16,883 19,046 25,525 26,611 27,906 27,190 32,655 31,941 35,351 39,186 Surplus/ Decificit ,486 1,553 1,060-3,040 1,385-1, ,255 2, Headcount increase % 5% 15% -4% 32% 34% -10% -14% 13% 0% 0% 0% 0% Personell as % of total costs 53.8% 50.3% 47.1% 47.0% 44.4% 50.0% 61.0% 56.9% 64.9% 59.8% 61.4% 55.5% 52.8% Annual Rate of pay Staff Costs % increase 12% 25% 10% 7% 51% 27% -2% 11% 11% 0.40% 0% 5% Increase % of Expenditure -100% 20.21% 34.01% 11% 12.82% 34.01% 4.25% 4.87% -2.6% 20.10% -2.19% 10.7% 10.85% % of surplus/ deficit to revenue 4.27% 7.24% % 8.42% 5.27% % 4.95% -5.85% -1.92% -2.71% 3.8% 5.6% 0.4% Financial Position Asset Base- Non Current 426 2,126 1,872 1,037 2,020 3,132 2,363 1, Asset Base- Current 1,263 1, ,366 1, Total Assets 1,689 3,981 2,219 2,402 3,750 3,155 2,686 2,180 1, Capital contribution Accumulated Deficit/ surplus 371 1,260-1, ,388-1, ,808-2,321-2,911-1, Total Liabilities 399 1,802 2,526 1,156 1,444 3,888 2,035 3,069 2,504 2,892 1,637 1,861 2,280 Total reserves & Liabilities 1,689 3,981 2,219 2,402 3,750 3,155 2,686 2,180 1, ,214 3,788 Acid Test Acid Test Movement

44 Analytical information Since establishment revenue grant grew by average of 20% with a healthy reserve ratio of 1:2. In 2006/7 experienced a 14% deficit (R1.6m) due to business growth thus resulting in erosion of reserves. All time low acid test ratio of reported. Business growth was evidenced by 34% increase in headcount (39) and 13% (R12.7m) increase in personnel costs, 40% in audit fees and steady increase of stakeholder management costs. Going Concern and the accumulated deficit of the Commission Commission has engaged the National Treasury and Parliament in 2011/12 financial year in order to stabilize its liquidity. As a result grant funding grew by 12% (R3m) in 2012/13 financial year out of those engagements with both Parliament and National Treasury. The overall baseline allocation grew by 7 Million over the MTEF period to address the accumulated deficit. The Commission will seek to source additional funding through partnerships with donor organizations in 2012/13 to deal with mutually beneficial initiatives that the Commission is unable to carry out on its current budget, including training of its research staff Joint initiatives were piloted with the Limpopo Provincial Treasury, Ekurhuleni Metro and the Free State Finance Committee where the Commission partnered with these organs of state to carry out its work and in the process managed to save costs Such initiatives will be pursued even more going forward. Memoranda of understanding have been concluded with the Human Sciences Research Council (work is on-going funded by UNICEF on a project), Food and Agricultural Policy Research Network and the Municipal Demarcation Board to share capacity on joint projects of mutual interest 18 th Anniversary IGFR Conference scheduled to take place this year. 44

45 Remarks on budgets In order to restore a good financial position with the none changing of the base line allocations the followings expenditure items are still being maintained RRP should be the major beneficiary Freeze on new recruitments Phasing in of projects Continuation with reducing administrative costs Reprioritisation the Implementation of the s Strategy Compliance with allocations Austerity measures still continue in order to reduce deficit Reducing number researchers travelling per trip Travelling on economy class Car rental reduced to a lower grade Office space: finalising the lease with DPW

46 Thank You 46