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NATIONAL TREASURY BRIEFING TO THE
STANDING COMMITTEE ON FINANCE
ON THE 2015/16 QUARTER 1 & 2 REPORTS
Presenter: Lungisa Fuzile | Director-General, National Treasury | 13 October 2015
Programme Name
Targets Status
Targets Achieved Targets Partially
Achieved Targets Not Achieved
Administration 8 2 0
Tax and Financial Sector Policy 4 1 0
Budget Office and Public Finance 4 1 0
Assets and Liability Management 4 2 0
Civil Military Pensions, Contributions to
Funds and Other Benefits
3 1 0
Technical Support and Development
Finance Programme Management
6 5 7*
2
Quarter 1 summary of service delivery targets
Status of the service delivery targets for Quarter 1 2015/16 Financial Year
Indicator Quarter 1 target Target performance status
Administration
Cost efficient management of goods and services. Saving of 1% on goods and services. Partially achieved
Provide an effective and efficient information and
communication technology (ICT) service.
20% of approved ICT solutions deployed with 95%
compliance to SLA/OLA.
Achieved
Retain appropriately skilled personnel: Agreed percentage of
positions filled
89% of positions filled Achieved
Retain appropriately skilled personnel: Agreed percentage of
positions retained
95% retention rate Achieved
Business Continuity Management (BCM) facility established
and fully functional
80% of the continuity site fully operational. Achieved
Implement Enterprise Risk Management (ERM) strategy. 25% implementation of enterprise risk management
strategy
Achieved
Vetting of identified employees 10% vetting of identified employees Achieved
Retention of intellectual capital and institutional memory –
Knowledge Management (KM).
Pilot knowledge assets harvesting workshops in the
identified divisions.
Achieved
Exercise oversight over the public entities to enable the
achievement of government policy objectives in a financially
sustainable manner
First draft to be submitted to Public Entity Oversight Unit
(PEOU) in the 2nd quarter
Achieved
Implement the risk-based internal audit plan 30% implementation of the annual Risk - based Internal
Audit Plan.
Partially achieved
3
Quarter 1 targets performance status
Quarter 1 service delivery targets performance
Indicator Quarter 1 target Target performance status
Tax and Financial Sector Policy
Number of papers published by research
institutions and internally
Ten (10) academic and research institution
papers
Achieved
Implement Twin Peaks model legislation Enabling legislation to be introduced to
parliament during 2015 legislative cycle
Partially achieved
Implement savings and retirement policies Manage regulatory reform process through
further discussions of NT
Achieved
Provide economic analysis and assessment
of government policy proposals
Economic reports reflecting the number of
statistical releases of key economic data,
within two days of publication.
Achieved
Development and maintenance of economic
models
Model updates. Achieved
4
Quarter 1 targets performance status
Summarised Quarter 1 service delivery targets performance
Indicator Quarter 1 target Target performance status
Budget Office and Public Finance
Ensure enhanced alignment of budget documentation
with fiscal guidelines based on principles of
countercyclicality, debt sustainability and
intergenerational equity
Design fiscal risks measures. Convene meetings
with stakeholders across Treasury
Achieved
Presenting public finance statistics according to function
and economic classification for consolidated government
i) Prepare baseline estimates
ii) Preliminary outcomes report data
iii) Preliminary annual financial statements (AFS)
numbers update.
Achieved
Providing guidance to departments and entities on the
classification of expenditure.
i) Issue training material for the updated SCOA
ii) Respond to SCOA requests within two weeks
iii) Convene monthly SCOA user forums
Partially achieved
Provide timely sectoral analysis and advice for policy
framework development.
100% of Cabinet memoranda to reach Ministry at
least one day in advance of the relevant Cabinet
meeting.
Achieved
Introduce reforms to enhance provincial and local
government fiscal frameworks
Gazette changes to public transport grant.
Begin consultations on detailed changes to other
local government infrastructure grants.
Consultation on draft amendment to the Municipal
Fiscal Powers and Functions Act (MFPFA).
Achieved
5
Quarter 1 targets performance status
Quarter 1 service delivery targets performance
Indicator Quarter 1 target Target performance status
Assets and Liability Management
Analysis of corporate plans, shareholder compacts and
annual reports of SOCs, DFIs and water boards
Submit report on analysis of corporate plans and
shareholder compacts of SOCs and DFIs.
Submit business plan for review of the Land Bank.
Achieved
Review of PFMA submissions and applications for
guarantees, funding, borrowing limits and MFMA tariff
increases
Compile submissions on PFMA, guarantee and
borrowing limit applications.
Achieved
Review of the regulatory environment for SOCs/DFIs Analyse and compile responses to legislation,
policies and their impact on SOC/DFIs.
Achieved
Meet government’s total annual borrowing needs R 70.1 Billion (Cumulative) Partially achieved
Ensure timely and accurate payment of interest and
redemptions
R 22.2 Billion (Cumulative) Partially achieved
Retain and attract new investment Conduct one domestic one foreign road show Achieved
6
Quarter 1 targets performance status
Quarter 1 service delivery targets performance
Indicator Quarter 1 target Target performance status
Civil Military Pensions, Contributions to Funds and Other Benefits
Pay 100% of all benefits within liability date Pay 100% of all benefits within the liability date. Partially Achieved, 91% of the
benefits were paid within the
liability date.
This is mainly due to delays in
submission of payments'
supporting documentation by
applicants (e.g. bank forms, Z894
etc.)
Ensure 100% compliance with National Treasury SLA 95% compliance with National Treasury SLA Achieved
To consistently improve client data integrity Complete monthly reviews (electronic data
verification) and undertake improvements as
opportunities are identified.
Achieved
100% customer service complaints are resolved within
seven days
100% complaints received are resolved within
seven days.
Achieved
7
Quarter 1 targets performance status
Quarter 1 service delivery targets performance
Indicator Quarter 1 target Target performance status
Technical Support and Development Finance Programme Management
Establishment of GTAC and Programme 8 management
office
Quarterly reports to the
minister
Achieved
Number of technical assistance projects supported 100 + Partially Achieved
Capital project advice and expenditure reviews on behalf
of National Treasury
>10 projects a year Achieved
Number of interns appointed to municipalities 550 Achieved, 1281 interns serving on the internship
programme as 31 May 2015.
Number of municipalities assisted through MFIP 30 Partially Achieved
Audit action plans developed and implemented 278 Partially Achieved, 241 Municipalities had their audit
action plans for 13/14 in place by end of quarter one.
The outstanding Municipalities have developed their
audit action plans by quarter 2.
Long-term urban regeneration programmes registered
(cumulative)
15 Partially Achieved
Total number of catalytic projects approved (cumulative) 300 Achieved
Neighbourhood Development Partnership Grant projects
under construction (cumulative)
10 Achieved
Estimated third-party investment leveraged (cumulative) R 3000 Million Not Achieved
8
Quarter 1 targets performance status
Quarter 1 service delivery targets performance
Indicator Quarter 1 target Target performance status
Technical Support and Development Finance Programme Management
Number of projects confirmed for planning within
identified integration/ spatial transformation zones (per
year)
10 Partially Achieved
Integrated city development projects under
implementation
6 Achieved
Number of Jobs Fund projects approved (cumulative) 125 Not Achieved
Grant funding approved (cumulative) R7 950 m Not Achieved
New jobs contracted (cumulative) 140 000 Not Achieved
Placements contracted (cumulative) 70 000 Not Achieved
Training contracted (cumulative) 160 000 Not Achieved
Jobs Fund evaluation reports and dissemination of
learning
3-5 case studies.
1 learning event.
Initiate mid-term evaluation.
Not Achieved
9
Quarter 1 targets performance status
Quarter 1 service delivery targets performance
2015/16 QUARTER 2 REPORT
Programme Name
Targets Status
Targets Achieved Targets Partially
Achieved Targets Not Achieved
Administration 6 4 0
Tax and Financial Sector Policy 5 0 0
Budget Office and Public Finance 3 2 0
Assets and Liability Management 5 0 0
Civil Military Pensions, Contributions to
Funds and Other Benefits
3 1 0
Technical Support and Development
Finance Programme Management
9 5 4
11
Quarter 2 summary of service delivery targets
Status of the service delivery targets for Quarter 2 2015/16 Financial Year
Indicator Quarter 2 target Target performance status
Administration
Cost efficient management of goods and services. Saving of 1.5% on goods and services Partially Achieved
Provide an effective and efficient information and
communication technology (ICT) service.
40% of approved ICT solutions deployed with 95%
compliance to SLA/OLA
Partially Achieved
Retain appropriately skilled personnel: Agreed percentage
of positions filled
91% of positions filled. Achieved
Retain appropriately skilled personnel: Agreed percentage
of positions retained
93% retention rate. Achieved
Business Continuity Management (BCM) facility established
and fully functional (People, Systems and Assets).
90% of the continuity site fully operational Partially Achieved
Implement Enterprise Risk Management (ERM) strategy. 50% implementation of enterprise risk management
strategy
Achieved
Vetting of identified employees 25% vetting of identified employees Achieved
Retention of intellectual capital and institutional memory –
Knowledge Management (KM).
i) Training and facilitation of knowledge assets harvesting
workshops in the identified divisions.
Achieved
Exercise oversight over the public entities to enable the
achievement of government policy objectives in a financially
sustainable manner
i) Engagements with and reviews of public entities: 1st
draft of strategic and annual performance plans.
ii) Public entities 2nd quarter report submissions to
Minister
Achieved
Implement the risk-based internal audit plan 60% implementation of the annual Risk-based Internal
Audit Plan
Partially Achieved
12
Quarter 2 targets performance status
Quarter 2 service delivery targets performance
Indicator Quarter 2 target Target performance status
Tax and Financial Sector Policy
Number of papers published by research
institutions and internally
10 academic and research institution papers.
Achieved
Implement Twin Peaks model legislation Enabling legislation.to be introduced to
parliament during 2015 legislative cycle
Achieved
Implement savings and retirement policies Manage regulatory reform process through
further discussions of NT reform proposals
with stakeholders
Achieved
Provide economic analysis and assessment
of government policy proposals
Economic reports reflecting the number of
statistical releases of key economic data,
within two days of publication.
Achieved
Development and maintenance of economic
models
Model updates Achieved
13
Quarter 2 targets performance status
Summarised Quarter 2 service delivery targets performance
Indicator Quarter 2 target Target performance status
Budget Office and Public Finance
Ensure enhanced alignment of budget documentation with
fiscal guidelines based on principles of countercyclicality,
debt sustainability and intergenerational equity
Complete first draft of fiscal risks write-up Achieved
Presenting public finance statistics according to function and
economic classification for consolidated government
i) Development/ revision of budget templates for
Budget 2015
ii) Presentations in budget workshops
iii) Roll out of quarterly reporting for public entities
iv) Move IYM, preliminary AFS and MTEC data to
storage
Achieved
Providing guidance to departments and entities on the
classification of expenditure.
i) Roll out SCOA training
ii) Issue at least three classification circulars
iii) Convene monthly SCOA user forums
Partially Achieved
Provide timely sectoral analysis and advice for policy
framework development.
100% of Cabinet memoranda to reach Ministry at least
one day in advance of the relevant Cabinet meeting.
Achieved
Introduce reforms to enhance provincial and local
government fiscal frameworks
i) Present progress to Budget Forum
ii) Submission of draft amendment to MFPFA to
cabinet
Partially Achieved
14
Quarter 2 targets performance status
Quarter 2 service delivery targets performance
Indicator Quarter 2 target Target performance status
Assets and Liability Management
Analysis of corporate plans, shareholder compacts and
annual reports of SOCs, DFIs and water boards
i) Submit report on analysis of corporate plans of water
boards
ii) Compile and disseminate a bulletin on quarter 1
infrastructure spending by SOCs/DFIs
iii) Engage all the relevant stakeholders
Achieved
Review of PFMA submissions and applications for
guarantees, funding, borrowing limits and MFMA tariff
increases
i) Compile submissions on PFMA, guarantee and
borrowing limit applications
ii) Compile submissions on funding requests from
SOCs.
Achieved
Review of the regulatory environment for SOCs/DFIs Analyse and compile responses to legislation, policies
and their impact on SOCs/DFIs
Achieved
Meet government’s total annual borrowing needs R156.7 billion (cumulative)
Ensure timely and accurate payment of interest and
redemptions
R89.8 billion (cumulative) Achieved
Analysis of corporate plans, shareholder compacts and
annual reports of SOCs, DFIs and water boards
i) Submit report on analysis of corporate plans of water
boards
ii) Compile and disseminate a bulletin on quarter 1
infrastructure spending by SOCs/DFIs
iii) Engage all the relevant stakeholders
Achieved
15
Quarter 2 targets performance status
Quarter 2 service delivery targets performance
Indicator Quarter 2 target Target performance status
Civil Military Pensions, Contributions to Funds and Other Benefits
Pay 100% of all benefits within liability date Pay 100% of all benefits within liability date Partially Achieved
Ensure 100% compliance with National Treasury SLA 95% compliance with National Treasury SLA Achieved
To consistently improve client data integrity Complete monthly reviews (electronic data
verification) and undertake improvements as
opportunities are identified.
Achieved
100% customer service complaints are resolved within
seven days
100% complaints received are resolved within
seven days
Achieved
16
Quarter 2 targets performance status
Quarter 2 service delivery targets performance
Indicator Quarter 2 target Target performance status
Technical Support and Development Finance Programme Management
Establishment of GTAC and Programme 8 management
office
Quarterly reports to the minister Achieved
Number of technical assistance projects supported 100 + Partially Achieved
Capital project advice and expenditure reviews on behalf of
National Treasury
>10 projects a year Achieved
Number of interns appointed to municipalities 800 Achieved
Number of municipalities assisted through MFIP 40 Achieved
Audit action plans developed and implemented 278 Achieved
Long-term urban regeneration programmes registered
(cumulative)
15 Achieved
Total number of catalytic projects approved (cumulative) 315 Partially Achieved
Neighbourhood Development Partnership Grant projects
under construction (cumulative)
20 Achieved
Estimated third-party investment leveraged (cumulative) R 3000 Million Not Achieved
17
Quarter 2 targets performance status
Quarter 2 service delivery targets performance
Indicator Quarter 2 target Target performance status
Technical Support and Development Finance Programme Management
Number of projects confirmed for planning within
identified integration/ spatial transformation zones (per
year)
10 Achieved
Integrated city development projects under
implementation
6 Achieved
Number of Jobs Fund projects approved (cumulative) 125 Partially Achieved
Grant funding approved (cumulative) R7 950 m Partially Achieved
New jobs contracted (cumulative) 140 000 Not Achieved
Placements contracted (cumulative) 70 000 Not Achieved
Training contracted (cumulative) 160 000 Not Achieved
Jobs Fund evaluation reports and dissemination of
learning
i) 3-5 case studies.
ii) 1 learning event.
iii) Initiate mid-term evaluation
Partially Achieved
18
Quarter 2 targets performance status
Quarter 2 service delivery targets performance
NATIONAL TREASURY
FINANCIAL PERFORMANCE AS AT 30/9/2015
Performance per programme
20
Programme Final Budget
Casflow for the
period Actual outcome Variance % spend
1. Administration 366,665 171,090 169,653 1,437 99.2%
2. Eco Pol, Tax, Fin Reg & Res 133,892 64,852 61,842 3,010 95.4%
3. Public Finance & Budget Man 256,965 130,340 130,997 (657) 100.5%
4. Asset & Liability Management 3,116,930 1,049,206 1,044,148 5,058 99.5%
5. Fin Systems & Accounting 751,362 316,683 346,719 (30,036) 109.5%
6. International Financial Relations 1,247,442 57,468 26,454 31,014 46.0%
7. Civ & Mil Pen, Cont to Funds 3,962,941 1,605,112 1,497,961 107,151 93.3%
8. Tech Sup & Dev Finance 3,143,863 1,725,001 1,095,661 629,340 63.5%
9. Revenue Administration 9,434,439 4,717,220 4,717,220 - 100.0%
10. Fin Intel & State Security 4,542,805 2,261,849 2,261,849 - 100.0%
Total National Treasury 26,957,304 12,098,821 11,352,504 746,317 93.8%
Outcome per economic classification
21 21
Item Classification Final Budget
Cashflow for
the period Actual Outcome Variance % spend
Compensation of employees 725,539 369,026 373,251 (4,225) 101.1%
Goods and services 1,222,576 560,624 485,745 74,879 86.6%
Payments for capital assets 16,403 4,390 4,662 (272) 106.2%
Total Operational Expenditure 1,964,518 934,040 863,658 70,382 92.5%
Payment for Financial Assets 3,370,684 1,000,790 1,000,711 79 100.0%
Transfers and Subsidies 21,622,102 10,163,991 9,488,135 675,856 93.4%
Total National Treasury 26,957,304 12,098,821 11,352,504 746,317 93.8%
Provincial Equitable Share 382,673,477 191,336,757 191,336,757 - 100.0%
State Debt Costs 126,440,428 66,186,036 62,684,144 3,501,892 94.7%
Fuel Levy 10,658,909 3,552,969 3,552,969 - 100.0%
National Revenue Fund Payments 121,000 121,000 - 121,000 0.0%
Total Statutory Transfers 519,893,814 261,196,762 257,573,870 3,622,892 98.6%
Significant variances and reasons (1/3)
22 22
The main items making up the overall positive variance of R 746.3 million
are Transfers (R 669.3 million) and Operational Expenditure (R 77 million),
as follows:
• R 427.9m representing underspending by the Employment Creation
Facilitation Fund due to project delays. Some projects requested an
extension of the implementation period which has impacted the
scheduling of grant disbursements.
• R 217.7m representing a payment holiday on the Political Office Bearers
Fund due to the fund being in surplus.
• R 127.3m representing underspending on the Neighbourhood
Development Partnership Grant as a result of delays in the procurement
processes, unspent municipal transfers from the previous year and
payments to some municipalities being withheld due to non-compliance
with the DORA and the NDPG framework.
Significant variances and reasons (2/3)
23 23
• R 26.5 million saving on the transfer payment to the African Development
Fund.
• R 20.5 million representing underspending on the Cities Support
Programme as a result of delays in the transfer of the funds to the DBSA,
owing to the possible configuration and redirection of funds to the Project
Preparation facility.
• R 6.7 million representing underspending on the Infrastructure Delivery
Improvement Programme. The second transfer payment to DBSA has
not been effected owing to the slow procurement of Technical Assistants
by the DBSA.
• R 11.1 million not yet settled due to unresolved disputes on the rent and
municipal charges billed for the 2nd quarter, as well as charges for data
lines and internet charges billed in the 2nd quarter.
Significant variances and reasons (3/3)
24 24
• R38.4 million representing the balance of under spending on various
programmes.
• The aforementioned positive variances are partially offset by
overspending of R 130.1 million to the Government Employees Medical
Scheme in respect of the final obligation for the post retirement medical
benefits.
Questions and Answers
Thank You
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