Question NW3726 to the Minister of Finance
02 January 2024 - NW3726
Komane, Ms RN to ask the Minister of Finance
Considering that the Portfolio Committee on Public Service and Administration paid an oversight visit to the (a) Northern Cape and (b) Free State in May 2023, where it identified the common challenge to be that the State lacked internal capacity as most reports were not showing alignment between the budget and procurement plans, what steps has the National Treasury taken to date to address the specified issue of misalignment between budget and procurement?
Reply:
Section 27(3) of the Public Finance Management Act (PFMA) states that an annual budget must be in accordance with a format prescribed by the National Treasury. The Medium-Term Expenditure Framework (MTEF) Technical Guidelines 2024 for provinces were issued in June 2023 to make such prescriptions, provide government departments, as well as provincial public entities, with guidance on how to prepare their medium-term estimates for the 2024 Budget and to promote alignment between the budget and procurement plans.
As part of these guidelines, infrastructure projects and programmes must be undertaken following the Infrastructure Delivery Management System (IDMS) supported by the Framework of Infrastructure Delivery and Procurement Management (FIDPM). Infrastructure (User) Asset Management Plan (IMAP/U-MAP) must be prepared and updated annually outlining the asset activities and resources required. The plan must include a list of programmes and projects for a minimum period of five years. To promote alignment between the budget and procurement plans, the IAMP/UAMP must inform the development of the Infrastructure Programme Management Plan (IPMP) and Infrastructure Procurement Strategy (IPS) which specifies what the department intends to achieve in the next 3 years of implementation of projects/programmes.
In May 2023, the National Treasury also published a Guideline on Budget Submissions for Large Strategic Infrastructure Proposals. This guideline invites submissions from public institutions in respect of large infrastructure projects and/or programmes that require budget support over the 2024 MTEF. To promote alignment between the budget and procurement plans, each proposal should include a procurement strategy that details the selected packaging, contracting, pricing and targeting options for all the required goods and services or a combination thereof as well as the procurement procedure to ensure alignment to Constitutional requirements and other legislative requirements. Furthermore, all proposals that require direct budget support over the 2024 MTEF must be shovel ready – in other words, they should be ready for immediate procurement, contracting and construction.