ATC160315: Report of the Standing Committee on Appropriations on its Strategic Planning Session held from 13 to 15 October 2015, dated 19 February 2016
Having undertaken its Strategic Planning Session from 13 to 15 October 2015, the Standing Committee on Appropriations reports as follows:
The Standing Committee on Appropriations (the Committee) was established in terms of the Money Bills Amendment Procedure and Related Matters Act, No 09 of 2009 (the Money Bills Act). In terms of section 4(3) of the Money Bills Act, each House must establish a Committee on Appropriations whose powers and functions include considering and reporting on the following matters:
- Spending issues;
- Amendments to the Division of Revenue Bill, the Appropriation Bill, Supplementary Appropriation Bill and the Adjusted Appropriation Bill;
- Recommendations of the Financial and Fiscal Commission (FFC), including those referred to in the Intergovernmental Fiscal Relations Act, 1997 (Act No. 97 of 1997);
- Reports on actual expenditure published by the National Treasury (section 32 reports); and
- Any other related matters set out in this act. While government continues to spend significant resources on social services and implement a budget framework that aims to protect service delivery, the triple challenges of poverty, inequality and unemployment remain ever prevalent and yet there remains much more that still needs to be done. It is within this context that the Standing Committee on Appropriations (the Committee) felt it needs to significantly enhance its oversight role in ensuring there is value for money in the delivery of public services. To this end, the Committee undertook its Strategic Planning Review Session at Le Franschoek Hotel and Spa in Franschoek, from 13 to 15 October 2015. The objectives of the planning session are outlined in the following section.
The objectives of the Strategic Planning Session were as follows:
- To increase the Committee’s capacity and knowledge in order to improve oversight over budget, procurement and infrastructure programmes;
- To increase the Committees’ knowledge of the developments in the global and domestic economy;
- To ensure that there is a shared understanding on the role of Committees in the implementation of the Strategic Plan for the 5th Democratic Parliament 2014-2019; and
- To ensure that the Strategic and Operation Plan of the Committee is aligned with the Strategic Plan for the 5th Democratic Parliament 2014-2019.
The Planning Session was attended by the following Committee Members: Mr SP Mashatile (Committee Chairperson, African National Congress [ANC]); Mr NE Gcwabaza (ANC); Dr CQ Madlopha (ANC); Ms MNS Manana (ANC); Ms SCN Shope-Sithole (ANC); Ms RE Nyalungu (ANC); Mr A Mcloughlin (Democratic Alliance [DA]); Dr MJ Figg (DA); and Mr AM Shaik-Emam (National Freedom Party).
The Committee was supported by the following Parliamentary Staff Members: Mr D Arrends (Committee Secretary); Ms Z Hulley (Committee Secretary); Mr T Masoeu (Content Advisor); Mr M Zamisa (Committee Researcher); Mr M Dolo (Project Manager/Session Facilitator); Mr M Zwane (Project Manager/ Session Facilitator); Ms N Chaso (Committee Assistant); and Ms P Kakaza (Executive Secretary to Chairperson).
In order to meet the objectives as per section 1.1, the following key stakeholders addressed and briefed the Committee: Financial and Fiscal Commission (FFC); Development Bank of Southern Africa (DBSA); International Monetary Fund (IMF); Auditor-General of South Africa (AGSA); South African Local Government Association (SALGA); and Parliamentary Strategic and Business Planning Office (PSBPO).
1.3 Session Methodology
The session involved training and capacity building for the Members of the Committee; facilitated presentations by Committee Stakeholders and discussion involving Members of the Committee; and facilitated planning involving Members of the Committee and Support staff. The session will produce a draft Strategic Plan 2014 - 2019 and Operational Plan 2015 to 2017 for the Committee.
1.4 Presentation briefs
Stakeholders were required to make presentations on their role and support to the Committee and on issues pertaining to committee strategy, fiscal policy and attaining value for money in public finances. In particular, the following stakeholders were given specific briefs as follows:
- Training on:
- Budget analysis in terms of key documents of the South African Budget Process and analysis tools of the government oversight process (FFC);
- Analysis of the government’s infrastructure programmes and how oversight in this area can be made effective (DBSA);
- Procurement models in the provision of social and economic infrastructure and how oversight in this area can be made effective (DBSA);
- Discussion on trends in the domestic and global economy and major constraints confronting the country’s fiscal policy framework (IMF);
- Audit Outcomes for the 2014/15 financial year and implications for oversight (AGSA);
- Discussion on challenges and opportunities in the country’s Inter-Governmental Fiscal Framework for meaningful oversight (SALGA); and
- Significant developments in Parliamentary budget oversight in South Africa and internationally and Parliament’s 2015 Strategic Plan and implications thereof for the work of Committees (PSBPO).
- Key Issues Raised during interactions
The following key issues emanated from the presentations by stakeholders and related Committee deliberations:
- Alignment of spending priorities with the Medium Term Strategic Framework and ensure that spending performance is aligned with predetermined objectives and outcomes
The Committee was of the view that in order to derive value for money and ensure progress towards the achievement of MTSF goals, it was important to scrutinise department spending priorities for alignment with the MTSF. Furthermore, it was agreed that spending outcomes should be aligned with the attainment of predetermined objectives and that the Committee would monitor this linkage through the assistance of the Department of Planning, Monitoring and Evaluation, the Parliamentary Budget Office and Auditor General of South Africa.
The Committee highlighted the need for thorough interrogation and verification of the department’s performance. It was important that performance standards be maintained and that no department regresses in terms performance. Critical in this respect will be the need for continuous feedback and responses by departments and state agencies on work undertaken by the Committee in the various outcome areas. A positive example of Committee action which was highlighted includes the emphasis placed by the Members of the Committee on the issue of payments for municipal services by government departments which has now been directly responded to by National Treasury and government clusters.
The Committee views the emphasis on value for money as especially critical given the significant size of the state’s procurement budget. It was highlighted that the level of compliance with supply chain regulations will need to improve and this includes state agencies paying suppliers within the prescribed time frames. In the medium term, the Committee will work on ensuring that budgets grow in real terms for deserving departments.
- Focused collaboration between Committees of both Houses
In order to foster collaboration with other Committees, it was re-emphasised that joint hearings with portfolio committees on quarterly expenditure performance should result in more concrete joint recommendations. In addition, it was agreed that the Committee would encourage Portfolio Committees to make recommendations to it on vote allocations/ appropriations as per Section 10 (5) and Section 10 (6) of the Money Bills Act. The Committee would also utilise Budgetary Review and Recommendations Reports to identify areas of focus and also engage with the Standing Committee on Finance and the Parliamentary Budget Office on the entire cycle of the budget process including the budget formulation phase.
This should enhance the Committee’s analysis and deliberations on envisaged policy plans which will have a significant impact on the budget in the medium to long term. In addition, this will allow for adequate preparations for important budget milestones such as the Medium term Budget Policy Statement, Division of Revenue Bills and Annual Appropriations Bills. It was highlighted that there should also be more regular engagements with the Finance Committees on cross cutting issues which have a bearing on both revenue and expenditure issues.
- Ensure proactive and visible oversight
The Committee emphasised the importance of in-year/quarterly engagements with the Auditor-General in order to detect whether key internal control mechanisms are in place in departments. The Committee would also through hearings with departments on quarterly expenditure gauge spending and outcomes progress and also track progress by departments in addressing matters raised by AGSA in management letters.
It was agreed that in order to be more proactive, the Committee would engage with key stakeholders in the relevant sectors to identify potential sites for oversight visits. The Committee would also broaden engagements on sites to include stakeholders representing community interest and not just departments.
The Committee agreed that there needs to be regular engagements between Parliament and the Executive on issues affecting the allocation of resources in the long term. This should entail regular meetings the Finance Ministry on major reforms underway in our budget framework whose effects are often only visible in the medium to long term.
The Committee agreed on ensuring that follow ups to findings and recommendations emanating from oversight visits should be an important part of the Committee’s oversight strategy and oversight activities. This may entail conducting follow up hearings on completed visits and the maintenance of a repeat offenders register.
- Broaden public participation
It was stated that the committee should broaden the participation of the public in the budget process through advertisements and press statements on community radio stations and in regional newspaper. Furthermore, to enhance public education, the Committee would publish a flyer for inclusion in the print media on the Committee’s views on the Budget. This will be complemented by regular communication to stakeholders on key activities of the Committee. Meetings of the Committee will need to get more media coverage including television and other media platforms.
- Utilise powers conferred by the Money Bills Amendment Procedures and Related Matters Act
The Committee agreed that a comprehensive review of the current budgetary framework/process should be undertaken in order to explore ways of strengthening the budgetary role of Parliament. This view emanated from a concern that the current budget process does not afford Parliament sufficient time to process proposed budgets and exercise its powers to amend the same as per the Money Bills Act.
In addition it was highlighted that the Committee should also focus more on the MTEF allocations and government’s future policy choices which will have a considerable impact on the fiscus.
- Improving the responsiveness of the Executive to Committee recommendations and requests by refining and strengthening Parliamentary mechanisms for follow-up
It was highlighted that in order to strengthen the accountability of the Executive to the Committee, the Committee should insist on leaner department delegations represented by Minister or Deputy Minister and the Accounting Officer. In cases where the Executive is not available, the Accounting Officer will take charge or senior official with delegated authority. The Committee further resolved that department presentations should focus on spending, outcome and service delivery information and not exceed 12 slides and that any other further information should be submitted as appendices. It is critical that the discussions remain at a strategic level with emphasis on progress made in realising the social and economic objectives of the state.
It was also emphasised that Parliament should improve its follow-up mechanisms with the Executive in terms of recommendations and requests made by Committees through Committee Reports adopted by the House.
- Way Forward
The Standing Committee on Appropriations, having held its Strategic Planning Review Session from 13 to 15 October 2015 agreed to the following:
- That the Committee support staff use the information emanating from the Committee’s session held from 13 to 15 October to review the existing Committee Strategic Planning document to be considered in a Committee meeting during Term 1 of 2016.
- That the Committee Strategic Planning document as per 3.1 above should inform the Operational Plan of the Committee with specific action items responding to key issues for 2016 and the years ahead in the Fifth Parliament.
Report to be considered.
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