Annual Budget for 2016/2017 Financial Year A presentation to the Portfolio Committee for Women in the Presidency The Parliament of the Republic of South Africa Annual Budget for 2016/2017 Financial Year The presentation provides summaries of financial management matters and results that were subjected to oversight by the Finance Committee and Audit Committee.

Table of Contents Introduction and Purpose of the presentation The Legislative framework The fiscal environment, principles and planning assumptions The 2016/17 proposed budget Risk Management

Purpose of the Presentation This presentation seeks to outline; the CGE budget for the ensuing financial year (2016/2017) Draw a link to the APP and other operating activities planned for the same period; Highlight challenges, threats and opportunities and other matters related to the management and control in execution of the plan Recommendations for the appropriation of funds in line with the proposed Annual Performance Plans for 2016/2017

Legislative Framework Chapter 13 of the Constitution of South Africa, Act 108 of 1996 and the Public Finance Management Act of 1999 (as amended) advances for values which espouses openness and accountability in the allocation and use of state resources. Under Chapter 1 of the PFMA (The Act) the values are bolstered further by provisions stating that the object of the Act is to secure transparency, accountability and sound management of the resources The Framework for strategic planning and Annual Performance plans of 2010 propagates that operational budgets must be linked to the institutions strategic objectives and their respective legislated mandates Section 38 of the PFMA and related Treasury regulations promotes the integration of Risk Management practices into strategic planning and financial controls

NT - Framework for strategic planning

The Fiscal environment At the back of the general macro economic conditions and the fiscal space, funds allocations through the standard MTEF processes were restricted to the MTSF priority areas. Budgetary reductions of 2014 negatively impacted the baseline allocation – A R3,1 m direct abatement in 2015/2016 period, rendering a nominal increase of R2,7 m for 2016/2017 inconsequential in real terms when the effect of inflation is factored A final allocation letter by National Treasury made available R69, 9 m available for programme spending during 2016/2017 – post MTEF, MTEC and ENE processes

Planning principles and assumptions General price changes at an annualised rate of 5.9% Cost of living adjustment for remuneration of staff and Commissioners estimated at an average of 6% p.a. for the 2016/2017 – This will inevitably absorb the additional allocation ( 6% of current COE baseline of R47m) Previous moratorium to fill unfunded positions in the establishment retained/upheld, noting the unchanging operating and funding circumstances To an extent possible, “zero basis” budgeting was followed, consultative approach taken where appropriate albeit with limit Rigidities present given the nature and structure of the CGE funding model v operating model – Most of cost components are structurally fixed ( Office overheads and establishment constituting over 80% of the annual budget). This leaves little space for planning of direct APP activities

Medium Term Expenditure Framework (MTEF) Perspective   Audited Outcome Revised estimate Medium-term estimate R thousand 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Administration 23 312 27 313 30 214 30 511 31 946 33 825 35 517 Creation of enabling gender equity legislation 12 852 12 634 15 811 18 493 19 752 20 502 21 527 Protection and promotion of gender rights 8 450 11 266 8 991 10 293 10 777 11 411 11 982 Monitoring and compliance to treaties 6 095 7 079 6 936 7 938 8 311 8 800 9 240 Total expense 50 709 58 292 61 952 67 235 70 786 74 539 78 266 adjusted by - Extra budgetary sources: savings, donations and reductions 4 441 781 1 128 2 665 -3 098 -4 648 Allocation from National Treasury 55 150 59 073 63 080 69 900 67 688 69 891 Annual growth in available funding 7% 11% -3% 3% 12%

The nature and structure of the CGE budget The budget of the Commission forms the main division of Vote 13 for the Ministry for women in the Presidency Three 3 programmes constitute the budget, namely; Commissioners Governance & Support, Corporate/Administration Support Main Service/Core The top spending drivers are: Compensation of Employees 73% ( We are a service driven and therefore & human resources intensive) Professional Services 7% ( Litigations, audit fees, etc) General Office overhead expenses takes up about 20% of the allocation, notably with contributions from Travel & Accommodation at 6% (outreach & visibility are at the core our strategy) and Telecommunications, Courier Services and vehicles expenses – 6% (Offices country-wide) Furthermore over 90% of the total spending is made out of unavoidable expenditure in the main of which majority is fixed (COE for e.g.) -Less flexibility

2016/2017 Total budget estimates

2016/2017 Total budget estimates Most costs are fixed – over 80% APP (mandate) a residue and inconsequential ; limiting effectiveness in execution of the long term strategy

2016/2017 Funded establishment + a legal intern

2016/2017 budget estimates

These activities are included in the APP of 2016/2017, however, are not funded by the 2016/2017 allocation from Treasury 2016/2017 extra budgetary funded items Project Extra budgetary source Training Manual and related train the trainer programme Retained surplus as granted by NT 20 Years review of the CGE Smart partnering + retained surplus VOIP solution implementation Self funding from projected savings on telephone expenses Media partnerships MoU with Partners - ongoing

Planned activities driven by internal resources, including Commissioners in the execution of public hearings amongst others The SO was allocated 17% of the overall budget at R11,5 m of which COE is the key contributor Other direct costs for goods & services contained through planned alternative(innovative) approach such as use of technology where relevant

The SO budget represents 33% of the annual allocation. Key drivers of activities are internal staff hence the COE constitutes a larger share of the SO budget The SO is activity intensive and includes direct interaction with target audience ranging from grass-roots to institutionalised stakeholders Most of the SO activities will be executed through smart-partnering with key stakeholders, achieving dynamic and cost effective realisation of goals

43% of the overall annual allocation will be spent on the SO Travel & accommodation gto cater for critical meetings by Commissioners and officials, ranging from Plenary, site administrative visits, parliament and for other oversight stakeholders Professional services includes Audit fees (R2,3m), HR services (IR/DC, Employee Wellness, recruitment adverts), Strategic planning, Radio campaigns, Audit Committee members fees, etc

Calling upon the identification of threats and opportunities Risk Management Calling upon the identification of threats and opportunities The only alternative to risk management is crisis management --- and crisis management is much more expensive, time consuming and embarrassing. JAMES LAM, Enterprise Risk Management, Wiley Finance © 2003 Without good risk management practices, government cannot manage its resources effectively. Risk management means more than preparing for the worst; it also means taking advantage of opportunities to improve services or lower costs. Sheila Fraser, Auditor General of Canada

Challenges and Opportunities Funding inadequacy Lesser scope for the APP activities Capital Expenditure never funded except from once-off grant by NT Baseline erosion over the years as the average increase was at a nominal 6%, and below the effective inflation rate of the CGE cost drivers Increased Mandate and Demand for Services Cost Containment implemented already bearing fruit Partnership and Collaboration strategies Technology platforms to extend reach and build efficiencies following the upgrade of IT infrastructure

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