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IN YEAR MONITORING &BUDGET PREPARATION WORKSHOP

27TH TO 29TH MAY 2014

PRESENTED BY BUDGET OFFICE

DEFINITION AND PURPOSE OF THE IYM

LINKAGE OF IYM TO OTHER PROCESSES

PREPARATION OF THE IYM

REVISION OF CASH FLOW PROJECTION

SHIFTINGS AND VIREMENTS

CONCLUDING REMARKS

PRESENTATION OUTLINE

PRESENTATION OUTLINE

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LINKAGE WITH THE BUDGET PROCESS

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1. Budget Preparation

3. Annual Cashflow projections

5. Commitment of Funds

(Implementation)

6. Incurring of expenditure

7. Reporting of Expenditure

(IYM tool )

2. Consideration

of procurement plan

4. Loading of budget

• Plan must be submitted to SCM.

• Commitments must be monitored monthly by

programmes

LEGISLATIVE FRAMEWORK

Legislative Framework

PFMA, Section 40(4)(c) states that the Accounting Officer of the department must within 15 days of the end of each month submit to the relevant treasury and executive authority responsible for that department the information for that month , a projection of expected expenditure and revenue collection for the remainder of the current financial year and when necessary, an explanation of any material variances and the summary of steps that are to ensure that the projected expenditure revenue remain within budget.

DEFINITION & PURPOSE

What In Year Monitoring is ?

In Year Monitoring is a mechanism designed to monitor monthly expenditure patterns.

Why do we prepare an IYM ?

In Year Monitoring is a tool meant to assists in determining whether programmes will succeed in implementing their plans. ( aligning performance with budget).

It is regarded as an “Early Warning Tool “which detects possible over/under expenditure.

It assists in the development of strategies to mitigate over and under expenditure.

It leads to effective and efficient utilisation of funds

PREPARATION OF THE IYM

DOCUMENTS TO BE USED TO CRAFT THE IYM REPORT BE USED

In Year Monitoring template

Annual Cashflow projections

Reports from BAS system

1. Expenditure control(commitment) report

2. Detailed commitment report

3. Expenses per month report

Operational and activity plan

PREPARATION OF THE IYM…CON’T

CRAFTING OF INFORMATION ON THE IYM TEMPLATE

Compensation of Employees

The following processes must be taken into account during the preparation of IYM:

Capturing of cashflow projections and budget

Capturing of actual expenditure of the previous months

Analysis of expenditure patterns to check abnormalities

Utilisation of the Persal Report to ensure correctness of placement of officials

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PREPARATION OF THE IYM..CON’T

Goods and Services, Capital Expenditure & Transfers and Subsidies

Capturing of cashflow projections and budget

Capturing of actual expenditure of the previous month using the report from the system.

Expenditure analysis must be done to check abnormalities and misallocations.

Ensure that spending is in line with the procurement plans.

Commitments must be taken into account when determining cash flow projection.

Check linkage with the cash flow projection.

REVISION OF CASH FLOW PROJECTIONS

Monthly Cash-flow projections are a breakdown of anticipated expenditure and revenue broken down into months.

It represents how the cash will flow from the Vote throughout the year.

Guided by PPT, projections are to be revised on quarterly basis, only when a need arise.

Activity plans, commitments must be considered when revising projections

Projections must be linked with the APP and OP’s Plan

They must be costed according to SCOA items

Ensure that funds are sufficient for each activity

VIREMENTS / SHIFTING OF FUNDS

To curb deviations between the expenditure and the allocated budget

which may occur in the cost centres during the course of the financial

year ,effective and appropriate steps must be taken. Some of the

occurrences may be as a result of

I. Imminent cost pressures

II. Implementation of new policy directives & commitments

III. Unanticipated events that may require immediate financial response

IV. Later or non-implementation of projects and savings.

VIREMENTS / SHIFTING OF FUNDS

As detailed in Circular 1 of 2014/15 Financial Year on the shifting and

virement of funds within programmes, virements/shiftings will be

processed on a quartely basis.

Activity plan must be taken into account

Ensure that funds are sufficient in each item

Operational plan must be considered during the shifting of funds to

ensure the movement of funds do not negatively affect the performance

of the department.

CHALLENGES

CHALLENGES

• No valid and clear explanations for deviations

• Incorrect capturing of actual expenditure on IYM

• Late submission of required information

• Non credible projections

PLAN FOR IN YEAR MONITORINGMILESTONES Programme Activities DATES

1. Preliminary reports will be distributed to all programmes

(i) Capturing of preliminary figures into IYM template(ii) Analysis of the IYM to check abnormalities(iii) Correction of abnormalities if identified

1st day of each month

2. Distribution of final BAS reports after the system closed

(i) Check changes against final report(ii) Analysis must be performed(iii) Variance explanations must be stated

8th day of each month

3. Submission of IYM reports by directorates to Budget Office

(i) IYM must be checked and verified by the senior manager and signed off(ii) Signed hard copy and soft copy must be submitted to Budget Office

9th day of each month

4. Distribution of IYM information to Programme Managers for verification of actuals, projections and detailed reasons for deviation. ( Treasury Format)

(i) IYM to be checked and verified by the programme manager(ii) Reasons for deviation must be provided by the programme manager

10th of each month

5. Submission of changes in projections and explanations for deviations to Budget Office in preparation for FMCM

(i) Changes and explanations will be submitted to Budget Office

11th of each month @ 12H00

6. Signing off IYM report by CFO, Programme Managers and SG ( To comply with Sec 40(4)(b) of PFMA)

(i) Signing of IYM by relevant officials 13th of each month

7. Submission of IYM to Provincial Treasury

(i) IYM submitted to Provincial Treasury 14th or 15th before 12h00 of each month

CONCLUDING REMARKS Together we can achieve great success by sharing ideas, knowledge and

assistance to each other.

The budget office depends on the co-operation from all programmes in

order to achieve its assigned roles and responsibilities.

“Coming together is the beginning, Staying together is progress, working together is success’’ Henry Ford

THANK YOU 

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