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Introduction
Honour to brief the Portfolio Committee on Water and Sanitation
Apologies from the PBO Director Prof. Mohammed Jahed
Presentation follows 3 themes:
 PBO and its mandate
 Functions and current projects
 Committee Chairs’ points of interests
Outline
 Legislative mandate
 Core functions
 Organisational structure
 Scope
 PBO’s recent projects
 Challenges & opportunities in RSA public finance
 Value for money in government expenditure
 BRRRs, PFMA sec 32 reports and Budget cycle and committees
oversight
 Conclusion and thank you
Legislative Mandate
 The Money Bills Amendment Procedure and Related Matters Act,
2009 provides for a procedure to amend money Bills before
Parliament and for norms and standards for amending money
Bills before provincial legislatures and related matters
The Act gives effect to sections 42(3) and 77(3) of the
Constitution
◦ Section 15 of the Act establishes a Parliamentary Budget Office
(PBO)
 According to Section 15(1) of the Act, the PBO should:
Provide independent, objective and professional advice and
analysis to Parliament on matters related to the budget and other
money Bills
Core Functions
 Section 15(2) outlines the core functions of the PBO:
 To support the implementation of the Money Bills Act by
undertaking research and analysis for the committees
referred to in section 4, including:
Annually providing reviews and analysis of the
documentation tabled in parliament by the executive in
terms of the act
Providing advice and analysis on proposed amendments
to the Fiscal Framework, Division of Revenue Bill and
money Bills and on policy proposals with budgetary
implications
Core Functions
Monitoring and synthesising matters and reports
tabled and adopted in a House with budgetary
implications, with particular emphasis on reports by
other committees
Keeping abreast of policy debates and developments
in key expenditure and revenue areas
Monitoring and reporting on potential unfunded
mandates arising out of legislative, policy and
budgetary proposals
Undertaking any other work deemed necessary by the
Director to support the implementation of this Act
Organisational Structure
Director
Prof Mohammed Jahed
Executive Assistant
Office Manager
Linda Mangwani
Alfred Monnakgotla
Admin Officer
Thobela
Bopelo
Deputy Director:
Economics
Deputy Director: Public Finance
Vacant
Economic
Analyst
Economic
Analyst
Rashaad Amra
Sean Muller
Deputy Director: Public Policy
Vacant
Finance
Analyst
Brandon Ellse
Vacant
Finance Analyst
Dumisani
Jantjies
Policy Analyst
Mmapula
Sekatane
Policy Analyst
Nelia Orlandi
Scope
 The scope of the PBO is monitoring, research,
technical analysis and advice on fiscal and related
economic matters
 The PBO currently supports the Finance &
Appropriations Committees in matters related to the
Money Bills Amendment Procedure and Related
Matters Act 9 of 2009
 It is intended that all oversight committees of
Parliament will be supported in the future
Scope (cont.)
 The PBO is currently focusing on:
Policy, Economic and Fiscal review and outlook reports
Economic and Fiscal indicator briefs
Research reports on specific topics as identified by committee
members
Stakeholder survey
Capacity building for members of parliament
Collaborate with other structures within parliament
 Analysis and reports for other committees upon chair’s request
Scope (cont.)
 Annual research outputs –Strategic Plan
Policy, economic & fiscal review and outlook (x2)
Economic and fiscal briefs (x4)
Research reports (x2)
Stakeholder survey
 Workflow model
Inputs and ideas to Committees
Committees selects particular issues & refers to PBO via Chair
PBO confirms parameters of study & timeline
Workflow
• Consideration of
money Bills
• Identify specific
analysis and research
required for decision
making
NA and NCOP Finance
and Appropriations
committees
Committee
Chairpersons
• Submit request to
the Executive
Authority
• Consider specific
request from
committees
• Forward requests to
Director PBO
Executive
Authority
Parliamentary
Budget Office
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Analyse
Advise
Build capacity
Facilitate discussions
Reporting lines
Executive
Authority
PBO
PBO’s recent projects: Published on PBO website
 Summary report on South African Sovereign credit rating-SCOF
 Summary report on 2012-13 MFMA audit outcomes-NCOP
 Summary report on South African Retirement reform by National Treasury
 Summary analysis of Proposed Tax Amendments by National Treasury and SARS
 Summary of analysis of Provincial Expenditure on COE per province.
 Facilitated NCOP strategic planning session
 Summary report of public hearings on draft tax bills
 Summary report on 2nd quarter employment statistics
 Summary brief on Intergovernmental Fiscal Relations in South Africa
 Briefs on Economic and Fiscal Review and Outlook
 Speaking notes and other reports
Challenges & opportunities in RSA public finance
 Lower revenue following from macroeconomic constraints
 Capacity to spend effectively to avoid:
Underspending
Inefficiencies
Poor Governance
 Revenue optimisation: tax system that maximises compliance and
collection, while promoting objectives of the state
 In short: balancing development and growth challenges with
fiscal stability: Appropriation Committee
Value for money in Government expenditure
 Committee cannot, itself, directly assess value for money
Have to rely on NT, DPME, FFC and departmental reports
PBO and/or researchers/content advisors can assist with specific issues that need
further/independent analysis
Often assess delivery at project/department level but what about government (strategic
and operational) integration ?
 How does value connect to Committee’s oversight role?
Underspending of allocated budget: missed opportunity
Actual expenditure not leading to desired outcomes
Actual expenditure not spent optimally/appropriately
 Each of the above implies different possible responses
 Definitional issues
E.g. ‘Value for money’ as per Auditor General’s ‘3 E’ performance audits
Budget Review and Recommendation Reports (BRRRs)
 In terms of Money Bills Amendment Procedure and Related Matters
Act, 2009, NA assess National Departments:
Medium term estimates of expenditure and performance
Expenditure reports, other financial statements, annual report, SCOPA
report
 Portfolio Committees to submit BRRRs: Oversight
Assess department’s service delivery performance given the budget
Assess department’s effectiveness and efficiency use of allocated resources
Include recommendation for use of allocated resources
 Support role: Research Unit, Content Advisors and
RU- Initiate the process of BRRRs
CA- Consolidate and finalise BRRRs
PBO- May give input on specific issues in the process, but not mandatory
PFMA Sec 32 reports for Oversight
 Sec 32 National Treasury to publish the reports within 30 days:
Actual Revenue for the period and for the year up to the end of the month
 Actual Expenditure per vote
Actual Borrowing for that period, but sec 40 provision important
 Sec 40, department must within 15 days after month end:
Actual revenue and expenditure for the preceding month
Anticipated revenue and expenditure for the current month
Projection for expected expenditure and revenue collection for the remainder of the
current financial year
Explanation for any variance and steps to ensure that projected expenditure and
expenditure remain in budget
 Oversight by the Committee
To call the department to account based the reports outcomes
Specific issues dealt by the committee
 Identify over or under spending earlier and commission mitigating measures
Use work by other institutions like AG, PSC, and others
Budget cycle and Committees oversight
Four Phases :
1. Planning Phase
Strategic Plans
MTSF
MTBPS
SONA
3. Implementation Phase
Parliament enact budget
Executives spend
Executives give account
2. Legislative Phase
Parliament involvement
Public hearing for issue to be taken into account
4. Evaluation Phase
Financial and Performance audits
(Budget Analysis Manual, 2011)
Budget cycle and committees oversight
April
May
June
July
August
Sep
Prioritisation, outcomes, draft plans, budget inputs
MTEC: Evaluation
and recommendation
stage
Preparing MTEC
submission
Macroeconomic
framework, fiscal policy
and DORA is agreed at
Budget Council
October
Tabling of
MTBPS and
adjusted
estimates in
government
spending
and policies
Nov
Dec
MTEC: Decision stage
and the Joint Cabinet
approvals of the final
allocations to spheres
and the specific Cabinet
approvals
to
departments
January
Feb
March
Revise strategic plans and
preparing final budget documents
for Budget Day in February.
MEC’s Finance table Provincial
budgets in Legislatures
Final quarterly reports and
financial reports submitted for
existing financial year
Budget cycle and committees oversight
(McIntyre and Nicholson, 1999)
Budget cycle and Committees oversight
Oversight role by the Parliament:
Representation: Parliament define public interest
and public agenda trough consultations process
Empowerment: Parliament to approves the
proposed budget by the government. Power and
authority to executives to operate, but
Scrutiny: Parliament scrutinize budget for priorities
and effectiveness (using, in-year and end-year
reporting and oversights visits)
Thank you
LOCATION:
103-107 Plein Street
Parliament Towers
4th Floor
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Prof. Mohammed Jahed
Alfred Monnakgotla
Linda Mangwani
Thobela Bopela
Mmapula Sekatane
Nelia Orlandi
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Rashaad Amra
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Brandon Ellse
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Sean Muller
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Dumisani Jantjies