IN YEAR MONITORING & BUDGET PREPARATION

WORKSHOPPREPARED BY BUDGET OFFICE

27- 29 MAY 2014

1

PRESENTATION OUTLINE

Purpose

Introduction

Legislative Framework

Budget Process Cycle

Budget Planning process

Road Map

Conclusion

2

PURPOSE

To provide guidance to sub-programmes on how the budget process will unfold in the current year

To provide guidelines on how the budget for 2015/16 MTEF will be prepared and the roles and responsibilities of all affected parties in the department.

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INTRODUCTION

Budgets form the plan according to which the different resources available to the department are allocated in order to achieve its goals

Each Directorate or Programme needs to ensure that priorities are funded

Senior staff should understand the budget, how it has been developed and further

implement and monitor progress.

Budget office will co-ordinate and consolidate budget for the department

Budget office provides financial guidance, exercise financial management and control to

ensure the department spends within its mandate and budget

Budget Office will continue assisting Directorates by doing working sessions

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LEGISLATIVE FRAMEWORK

Public Finance Management Act of 1999( PFMA)- provide direction on the management of state resources

Treasury Regulations - provide details to the management of state funds & resources Division of Revenue Act (DORA)- provide details on the budget laws & appropriations Treasury Circulars – provide guidelines on processes to be followed

BUDGET PROCESS CYCLE ANNUAL DEPARTMENTAL STRATEGIC AND BUDGET PLANNING CYCLE

STRATEGIC PLANNING: POLICY REVIEW AND REPRIORITIZATION (JUNE)

BUDGET GUIDELINE WORKSHOP

( JUNE)

FIRST BUDGET SUBMISSION (AUGUST)

MTEC HEARINGS (SEPTEMBER)

ADJUSTMENTS ESTIMATES

(SEPTEMBER/OCTOBER)

SECOND BUDGET SUBMISSION(NOVEMBER/ DECEMBER)

FINAL SUBMISSION (JANUARY/FEBRUARY)

BUDGET PROCESS REVIEW (MAY)

INTERNAL AND EXTERNAL STAKEHOLDERS INVOLVED DEPARTMENTAL PORTFOLIO COMMITTEE; MEC, BAC,ACCOUNTINGOFFICER, CFO, PROGRAMME MANAGERS, HEADS OF INFRASTRUCTURE, SCM, HR, BUDGET OFFICE, STRATEGIC PLANNING, DISTRICT OFFICES, CBS,SCOPA

MARCH: 1.Prepare Sec. 40(4)(a) Cash

FlowProjections2. Budget Loading.

APRIL: Authority To Spend /Implementation

of plans

BUDGET PLANNING PROCESS

1.Review past performance , in terms of impact, effectiveness and efficiency.

2.Review & identify the resources required to meet the needs of the department in that

particular year.

Personnel Cost ( Compensation of Employees)

Operational Cost ( Good & Services)

Capital Expenditure

Transfers & Subsidies ( Transfers to mun/bursaries/ gratuities)

HOW TO CALCULATE FOR RESOURCES REQUIRED

Costing of Compensation of Employees

Identify the no of people needed for the implementation of plans

Costing of current personnel (considering annual increment as per the guidelines)

Cost for the vacant posts ( replacements)

Review the indicative budget allocation to check adequacy of budget for the implementation of plans.

If funding is not adequate to meet your targets, revise the target to meet the resources available.

HOW TO CALCULATE FOR RESOURCES REQUIRED

Costing of Goods and Services

Identify funds to each performance indicator e.g. number of reports submitted to

Treasury as per PFMA and Treasury Regulations, Practice Notes and Treasury

Circulars

Identify the activities that are to be performed for the achievement of targets

Conduct sessions with Programme regarding the preparation of budget

Identify and cost for all resources needed e.g. venues and facilities ,stationery etc.

Directorates should make use of SCOA list in allocating funds

Budget for Accruals and at least 3% for Ad-hoc

( refer to Costing Sheet)

HOW TO CALCULATE FOR RESOURCES REQUIRED

Costing for Capital Expenditure

Identify the capital assets needs of the department (e.g. Furniture , Machinery & Equipment, Laptops etc.)

Submit the list of all the needs to SCM and DGITO

The SCM /DGITO perform an assessment of the needs, condition and present report to the Governance Committee

Based on recommendation by the committee the SCM or DGITO will implement

Infrastructure assessment must be conducted in order to determine what to be done

Costing for Transfers to municipalities

Costing is based on the assessment of what will be done for the municipalities

Reprioritization to assist the most deprived municipalities is recommended

Previous years performance of municipalities should be considered

CHALLENGES CHALLENGES RECOMMENDATIONSPoor planning by Directorates which result to late submission of information

Adhere to time frames

Shifting of funds in the first quarter • Plan properly to avoid this e.g. Budgeting for accruals

• Follow up on commitments Non Alignment of budget to plans resulting in inability to report

• Ensure that every resource requirement is budgeted for

• Credibility of the cash flow projections• Involvement of Project Managers in crafting the

budgetQuality assurance of information submitted to Budget office

Final budget documents thoroughly checked and signed off by Responsible Managers

ROADMAP FOR 2015/16 FINANCIAL YEAR BUDGETING PROCESS

DRAFT BUDGET PROCESS SCHEDULE - 2014/15 FINANCIAL YEAR

TIMEFRAME

MILESTONESCRITICAL

DATESACTIVITIES

April 2014

Request roll-over inputs from programmes

7-Apr-14 Programmes submit roll-over requests

  Submit roll-over Application to PPT 30-Apr-14  

June 2014

Issue 2015/16 Budget Preparation Document to Programmes

09 June 2014 Programmes analyze plans against budget

      Programmes commence budget costing

  Finalization and signing off costed budget

23 - 26 June 2014

Programmes submit a final costed budget and signed off at the venue

July 2014

Request inputs from HRM,HRD ,M&E,Disaster Management, Trad. inst Supp and Strategic Planning

07 - 10 July 2014

Relevant offices submit the following information:- - Personnel Numbers - Information on Training - Infrastructure Plans - Non Financial Information

DRAFT BUDGET PROCESS SCHEDULE - 2014/15 FINANCIAL YEARTIMEFRAME

MILESTONES CRITICAL DATES

ACTIVITIES

September

Request Programme to submit inputs to the Adjustment Estimate process

3 September

2014

Analyze current budget against plan/Identify virements - Submit inputs to Budget Office

  Attend Provincial MTEC Hearings 19 - 23 September

2014

All Programme Managers attend MTEC Hearings at Treasury

February 2015

Cash flow template issued to programmes

11 February

2015

Programmes attach timelines to the costed activities

  Programmes submits cash flow to budget office

18 February

2015

Programmes submit a final signed annual cash flow projections to budget office

March 2015

Budget loading commences 06 March 2015

 

  Budget loading completed 27 March 2015

 

  Copies of reports circulated to programmes for sign off

24 March 2015

Programmes check loaded budget report and notify budget office of any corrections

April 2015

Implementation of Plans 01 April 2016

Programmes start spending

CONCLUSION

Directorates must clearly derive the implementation strategies and plan properly before the

finalisation of budget to avoid delays in implementing its projects.

Directorates should also work closely with the strategic Planning Unit in ensuring that the

budget is aligned with the strategic documents

All Directorates should prioritize the budget process, budget office is just the coordinator and

the budget belongs to the each directorate

Lets face 2015 MTEF budget with more

determination and commitment

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

 

THANK YOU