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2008 Estimates of National Expenditure (ENE)

29 November 2007

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Content• 2008 Budget Process and MTEF

– Provisional allocation letters– Efficiency savings

• Critical dates• Important new features (departments and

entities)– Performance Information – Science and Technology– ODA

• Database

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Critical datesDistribution of database - departments 16 November 2007

Distribution of public entities database and guidelines 16 November 2007

Information session for departments 29 November 2007 (morning)

Information session for entities 29 November 2007 (afternoon)

Provisional allocation letters to departments 30 November 2007

Submission of first draft database and Appropriation Bill inputs by departments 7 December 2007

Submission of completed data files for Public Entities 10 December 2007

Submission of first draft chapter - departments and entities (including measurable objectives and indicators)

14 December 2007

Feedback on selected objectives and indicators from NT January 2008

Submission of second draft of database inputs 11 January 2008

Submission of second draft chapters – departments and entities (final indicators and objectives)

Mid January 2008

Submission of entities text – Social services 15 January 2008

Justice and protection services 16 January 2008

Central, Finance Administrative services 17 January 2008

Economic services and Infrastructure 18 January 2008

Final sign-off of chapters by departments First week February 2008

Budget day 20 February 2008

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Important Features• Accountability information

– Mirrors Appropriation bill for 2008/09

2008/09 2009/10 2010/11

Total to be Current Transfers and Payments for

R thousand appropriated payments subsidies capital assets Total Total

Programme 1 – – – – – –

Programme 2 – – – – – –

Programme 3 – – – – – –

Programme 4 – – – – – –

Programme 5 – – – – – –

Programme 6 – – – – – –

Programme 7 – – – – – –

Programme 8 – – – – – –

Programme 9 – – – – – –

Programme 10 – – – – – –

Total – – – – – –

Direct charges against the National Revenue Fund

– – – – – –

Total expenditure estimates – – – – – –

Executive authority

Accounting officer

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Important features cont.

• Programme purposes and objectives

• Strategic overview and key policy developments– 1 000 words– Recent achievement 2006/07 and 2007/08– Key performance indicators table (also entities)

Indicators Performance

Past Current Projected

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

………………………. …… …… …… …… …… …… ……

………………………. …… …… …… …… …… …… ……

………………………. …… …… …… …… …… …… ……

………………………. …… …… …… …… …… …… ……

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Important features cont

• Service delivery objectives and indicators – replaced by performance indicator table and strategic

overview section

• Efficiency savings• Transfers to public entities and agencies

– Do not duplicate under programme information– Applicable to trading entities

• Number formatting style– Full stop instead of comma– Space to separate thousands

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Infrastructure

• Five categories of infrastructure projects/ programmes:– “Mega” projects (cost more than R300 million per

year for minimum 3 years, or R900 million total project cost ), and should be reported as a single line item.

– “Large” projects (cost between R50 million and R300 million per year within a given MTEF); and

– “Small” projects (less than R50 million per year), should be grouped together and reported as a single item.

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Infrastructure categoris cont.

– Infrastructure transfers to other spheres and entities/agencies – the line item should reflect transfers by dept to entities/agencies and other spheres of government.

– Infrastructure/fixed installations transferred to households – the line item should reflect transfer of funds to households

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Contacts

• Provide details of dedicated ENE contact for department and entity

• Liaise with NT budget examiners

www.treasury.gov.za/publications/guidelines

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Performance information in the 2008 ENE

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ENE Performance Information

• In the 2008 ENE an effort is underway to improve the substance of non-financial performance information including the meaningfulness of measurable objectives and the usefulness of performance indicators for monitoring

• Measurable objectives (MO): – In some cases, MOs are vague and do not translate the programme purposes into

quantifiable goals reducing clarity concerning “what the money is being used for”• Performance indicators

– In general, there are too many indicators with the relevant indicators being crowded-out

• Resulted in part from the requirement that each subprogramme must have outputs indicators

– In general, there are not enough numbers and there are too many words making it difficult to monitor performance

• Resulted in overly flexible formats whereby reporting of milestones, dates and other qualitative performance information was not indicated separately

– The indicators are not broad enough • Resulted from the exclusive emphasis on output indicators at the expense of monitoring

other important areas such as inputs, activities and outcomes

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What’s in the instructions?• Strategies to address these improvements include:

– Measurable objectives• New bulleted format for presenting MOs (1-5 per

programme)• MOs have been moved to the front of the chapter

following the programme purpose• Requirement that MOs should identify the most

important programme areas by “providing a snap-shot of the main objectives (outputs and outcomes) of a programme based on its major operational elements”

• MOs are defined as quantifiable results that can be achieved within a foreseeable period

• We are not reinventing the MO’s, we are just trying to improve upon them so that they say more about the “how” aspect of achieving programme purposes

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What’s in the instructions?

• Strategies to address these improvements include (continued):– Key performance indicators

• Seven year timeframe format• Indicators have been moved to the front of the vote so that both

cross-cutting or programme-specific indicators may be highlighted• Indicators may relate to inputs, activities, outputs, outcomes and

may also provide contextual or explanatory information• Average of 10 performance indicators recommended per vote or

entity• Two areas to discuss performance:

– Quantitative performance indicators in the key performance table (also see guidelines on using percentages)

– Qualitative performance information in the strategic overview section

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Helpful tips• In general, indicators should relate to ongoing functions but may also

be project-specific• The average of 10 indicators per vote/entity means that the number of

indicators may range from 7 to 17 more or less depending on need• If an entity does not have a separate section at the back of the

chapter, specific indicators may be included in the department’s indicator table with a reference in the indicator title (e.g., number of scientific researchers on staff at xxx entity)

• Ensure that only numerical values are used to reflect past, current and projected performance in the seven year table

• Ensure that the indicator is clear and obviously relates to the work of the department. (e.g., “number of claims processed” could be clarified as “number of workers’ compensation claims processed per month”)

• The key indicators do not have to cover all the aspects of the departments work just the most important from an oversight monitoring standpoint

• Key performance indicators in the ENE represent only a small subset of departmental performance information for auditing purposes

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Helpful tips• Don’t forget to include the unit of measure in the indicator title• Don’t forget to provide a brief definition of each indicator (i.e., enough

detail to give a general understanding of the indicators• The process of piloting trendable and quantitative output and outcome

performance indicators at the subprogramme and programme level with 5 departments continues unaffected by the ENE changes

• Review the strategic plan • Review the subprogrammes and the outputs in the 2007 ENE. There are

many meaningful and useful indicators that may be carried-forward.• Review the Presidency’s “Development Indicators Mid-term Review” of 72

national indicators• Review the current MOs in the 2007 ENE. In some cases, they can be

subdivided into separate objectives in other cases they are already written in the form of quantifiable results and can be carried-forward

• If an indicator is cumulative then use the term “total” in the title (e.g., Total number of foreign missions in Africa – 06/07=45, 07/08=47 and 08/09=50)

• In an indicator is non-cumulative then use the term “new”, ”additional” or “per year” in the title (e.g., Number new of foreign missions in Africa per year – 06/07=0, 07/08=2 and 08/09=3)

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Indicators) Performance

Past Current Projected

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

Average monthly headcount of police officers on active duty 80 000 90 000 100 000 110 000 120 000 130 000 130 000

Average monthly headcount of detectives on active duty 10 000 10 000 10 000 10 000 10 000 10 000 10 000

Average monthly headcount of army recruits on active duty 100 000 100 000 100 000 100 000 100 000 100 000 100 000

Number of universities operated in South Africa 23 23 25 25 26 26 26

Number of FET colleges operated in South Africa 23 23 25 25 26 26 26

Number of claims processed per month 1 000 1 000 1 000 1 000 1 000 1 000 1 000

Average monthly headcount of inmates in prison 85 000 85 000 85 000 85 000 85 000 85 000 85 000

Number of engineering students graduating annually 20 000 20 000 20 000 20 000 20 000 20 000 20 000

Number of taxis scrapped per year - - 10 000 10 000 10 000 10 000 10 000

Percentage of claims (1 000) processed within 30 days 500 (50%) 500 (50%) 500 (50%) 500 (50%) 500 (50%) 500 (50%) 500 (50%)

Value of textile exports per year R1 000 000 R1 000 000 R1 000 000 R1 000 000 R1 000 000 R1 000 000 R1 000 000

Number of fatal accidents on the roads per year 10 000 10 000 10 000 10 000 10 000 10 000 10 000

Number of applicants per month 100 000 110 000 110 000 130 000 130 000 140 000 140 000

Number of claimants per month 2 000 2 000 2 000 2 000 2 000 2 000 2 000

Average number of buses on the roads per month n/a n/a 1 000 000 1 000 000 1 000 000 1 000 000 1 000 000

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Science and Technology expenditure

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Official development assistance expenditure

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Completion of ENE database

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Questions and Answers