PUBLIC FINANCIAL MANAGEMENT REFORMS What really works? A South African Perspective Sithembiso F Nomvalo Accountant-General - South Africa National Treasury 1 – 3 December 2008

1. PUBLIC FINANCIAL MANAGEMENT REFORMS What really works? A South African Perspective Sithembiso F Nomvalo Accountant-General - South Africa National Treasury 1 – 3 December 2008 ICGFM Conference Washington D.C

4. Structure of the SA Government

6. Accountability Framework 2. AGREEMENT - OUTCOMES 6. MANAGERIAL ACCOUNTABILITY 3. PERFORMANCE CONTRACT - OUTPUTS 1. ACCOUNTABILITY for OUTCOMES LEGISLATURE A O Line managers MINISTER 4. DELEGATION - OUTPUTS 5. STATUTORY ACCOUNTABILITY - OUTPUTS

7. Governance & Control Framework in SA Watchdog for the citizens Cabinet Member or Provincial MEC accountable to Legislature Has ultimate responsibility for the execution of policies, plans and objectives of the entity Provides advice to AO on enterprise RM Reviews and provides assurance over internal control, risk management and governance processes Management activity must include internal control & risk management

8. Reforms at a glance

10. Planning, budgeting and reporting cycle

11. Relationship between Strategic Plans & Annual Performance Plans

12. Developing Strategic Plans Medium Term Strategic Framework Top-down Linkages MTEF Five-year Strategic & Performance Plan Local Government IDPs Local Government IDPs Local Government IDPs Bottom-up Linkages National Spatial Development Perspective Provincial Growth & Development Strategy Sectoral Strategies President’s ‘State of the Nation’ address

13. Updating Strategic Plans MTEF Medium Term Strategic Framework National Spatial Development Perspective Provincial Growth & Development Strategy Sectoral Strategies Local Government IDPs Local Government IDPs Local Government IDPs Top-down Linkages Bottom-up Linkages Current Planning and Budgeting Cycle Next Year’s Part A of the Annual Performance Plan President’s ‘State of the Nation’ address

14. Activities and Timeframes National Treasury develops Medium Term Fiscal Framework National Budget Process Setting the Fiscal Framework and Revenue Sharing Provincial Budget Process Executive Committees set provincial priorities Departments develop Strategic Plans and initial MTEF estimates Medium Term Policy Priorities set by MinComBud FFC makes division of revenue recommendations National Treasury refines fiscal framework and makes division of revenue proposal Budget Council and Forum consider division of revenue proposals Medium Term Policy Priorities presented to Cabinet Draft provincial MTEFs presented to Executive Committees and MinMEC’s Cabinet sets Medium Term Policy Priorities and makes indicative allocations Departments adjust Strategic Plans and MTEF’s and submit to National Treasury Sectoral teams (10X10’s) review policies and work out budget implications for concurrent functions March April May June July August Prioritisation Preparation & review of MTEF submissions Review of fiscal framework & DoR Medium Term Strategic Framework and President’s State of the Nation Address Budget Council considers Medium Term Fiscal Framework February Sectoral teams (10X10’s) review policies and spending pressures on concurrent functions Departments develop Strategic Plans and initial MTEF estimates National Treasury issues Budget Guidelines

15. Departments adjust Strategic Plans and MTEF’s MTEC reviews Departments’ MTEF’s MinComBud reviews the MTEC recommendations Budget Council and Forum make final division of revenue proposals Extended Cabinet finalises macro and fiscal framework and division of revenue Division of Revenue Workshop on macro and fiscal framework MTBPS tabled in Parliament Departments finalise annual budgets and MTEF’s Departments finalise annual budgets and MTEF’s Cabinet approves final national budget and MTEF Executive Committees approves provincial budgets and MTEF’s National Treasury finalises annual fiscal framework MinComBud makes pre-final MTEF allocations Executive Committees make pre-final allocations Publication of Division of Revenue Bill Make final adjustments and prepare national budget documentation Make final adjustments and prepare provincial budget documentation Minister of Finance tables Division of Revenue Bill and national budget in Parliament MEC’s for Finance table provincial budgets in legislatures August September October December November February January MTEF recommendations Final decisions Preparation of budget documents Technical Committee on Finance reviews division of revenue proposals Provincial MTEC reviews Departments’ MTEF’s Provincial MTEC reviews Departments’ MTEF’s Activities and Timeframes National Budget Process Setting the Fiscal Framework and Revenue Sharing Provincial Budget Process Review of fiscal framework & DoR

20. Annual reporting 31 March 31 May Complete reporting template Submit AFS to AG & relevant treasury 31 August External audit Submit annual report & AFS to relevant treasury & EO 31 July Audit report to AO 31 September Table in Parliament/ Legislature

21. Consolidations 31 March 31 June Submit consolidation to AG 30 September Submit audited consolidation to treasury 31 October Table consolidation in Parliament/Legislature 31 May Consolidation of reporting templates 31 July

26. Thank you