Legacy Report for SCoA 2014 -2019 Finance and Economic Cluster: Committee Section Content Advisor: Phelelani Dlomo

PRESENTATION OUTLINE 1. INTRODUCTION 2. OBJECTIVES THAT INFORMED THE COMMITTEE’S APPROACH 3. KEY ACHIEVEMENTS ON SET OBJECTIVES 4. KEY FOCUS AREAS FOR FUTURE WORK (6TH PARLIAMENT) 5. KEY EMERGING CHALLENGES 6. SOME RECOMMENDATIONS

The main objective of the presentation: INTRODUCTION Is to highlight challenges which occurred in the 5th Parliament and outline areas of focus for the 6th Parliament. The main objective of the presentation:

KEY OBJECTIVES WHICH INFORMED THE COMMITTEE’S APPROACH IN THE 5TH PARLIAMENT: To influence budget policy decisions through effective implementation of the Money Bills Act; To strengthen oversight over budget performance of departments through proactive and visible oversight; To strengthen oversight over budget performance of departments through enhanced quarterly expenditure performance assessment; To ensure value for money and improved coordination in the provision of social and economic for infrastructure; Improve collaboration between Committees of both Houses and ensure proactive oversight on strategic issues; To facilitate public participation in the government’s budget processes; To invite international delegations to share best practices in budget oversight; To capacitate members and staff of the Committee.

KEY ACHIEVEMENTS ON THE STATED OBJECTIVES: Public hearings on the 2017 Appropriation Bill in Khayelitsha; A National Budget Dialogue on the 2018 National Budget; Engagement with aviation experts, economic experts, and other stakeholders on South African Airways (SAA) debt relief and recapitalisation; Joint hearings with the Portfolio Committee on Health on the effective co-ordination and alignment of national and provincial spheres of government; Regular inputs from Equal Education on Scholar Transport programme; Regular submissions from Rural Health Advocacy Project, Budget Justice Coalition; and Equal Education. Facilitating meaningful public participation and foster intergovernmental relations:

Capacitating members and staff the following trainings were done: National Treasury training on Supply Chain Management processes; APAC Training was attended; Financial and Fiscal Commission training on Budget Analysis focusing on Division of Revenue; and Appropriations.

Improving collaboration between Committees All the four Committees held joint briefings on areas of common interest on budget matters; A joint oversight visit to PRASA together with the Portfolio Committee on Transport in 2015, A joint oversight on Bucket Eradication Programme to Free State Province with the Portfolio Committee on Water and Sanitation and the Free State Portfolio Committee on Finance and Public Accounts in 2018;

Improving collaboration between Committees continues…, Portfolio Committees are always invited to be part of Section 32 expenditure report hearings with identified sector departments and entities. A joint hearing with the Portfolio Committee on Health was held in 2017, with all provincial health departments and the national Department of Health to discuss challenges in the health system - focusing on challenges around: value for money, efficient planning, resource allocation, poor maintenance of facilities, poor budgeting for health, non-compliance with supply chain processes, increase in the Medico Legal claims, under expenditure on National Health Insurance conditional grants etc.

Strengthening oversight over budget performance through quarterly expenditure reports, Departments were required to report on linkages between spending and actual performance and the progress on the attainment of MTSF targets; Quarterly briefings by the Office Chief Procurement Officer (OCPO) to facilitate in-year monitoring over deviations as an early detection mechanism for unauthorised or irregular expenditure; National Treasury was requested to start reporting on public entities as part of quarterly reports;

Influencing budget policy decisions through the Money Bills Act: In 2017 the Committee made amendments to the Adjustments Appropriation Bill [B25-2017]. The Committee compiled a risk statement for the first time; Overall, the Committee’s risk statement serves to identify and focus its attention to programmes that display planning and implementation weaknesses. The Money Bills Act has been reviewed in 2018 with a view to easing the timeframes to process the budgets Bills,

Sharing best practices on budget oversight with international delegations: The Committee embarked on a study tour to Germany and Sweden in January 2017; The Committee interacted with the ff delegations: Nigerian National Assembly Appropriations Committee, Budget Committee from Bundestag in Germany, South Korean Parliamentary delegation, and an Indian delegation from the National Institute for Public Finance and Policy (NIPFP).

Key areas for future work National Treasury projects to follow up: - Integrated Financial Management System project (IFMS); - Employment Creation Facilitation Fund (Jobs Fund). Infrastructure Fund (As introduced as part of the Economic Stimulus and Recovery Plan); Supply Chain Management reforms and amendment to legislation; Government Guarantees and implementation of conditions related to additional funding (bailouts) especially to SAA, SAPO, ESKOM and SA Express.

KEY ISSUES FOR FUTURE WORK CONTINUES… Work of the Presidential Infrastructure Coordinating Council (PICC) and progress on Strategic Infrastructure Projects (SIPs); Key programmes that present significant implementation risk includes the following: Water infrastructure projects, Expanded Public Works Programme, School infrastructure development (ASIDI), Learner Transport Programme, maintenance of existing infrastructure; Closer scrutiny of national departments reflecting high spending and yet low performance against planned targets; The following entities showing poor audit outcomes: Department of Basic Education, Independent Development Trust (IDT), South African Broadcasting Corporation (SABC), Passenger Rail Agency of South Africa (PRASA); Follow-up on turnaround plan for the following entities which received special appropriations: South African Airways, South African Post Office, SA Express, and ESKOM.

KEY ISSUES FOR FUTURE WORK CONTINUES… 1. Financial Recovery in the Department of Water and Sanitation; 2. Public Sector and Provincial Wage Bill; 3. Payment of monies owed to municipalities by both national and provincial departments; 4. Payment of monies owed by municipalities to ESKOM and Water Boards; 5. Payment of invoices within 30 days as prescribed by the PFMA; 6. DPW and SANDF finalise the function shift of infrastructure development and maintenance; 7. Finalise the location of the Scholar Transport function.

Key challenges emerging 1. Macro-challenges related to slow or declining economic growth necessitating government to do more with less; 2. Changes in parliamentary programme and their impact on planned committee activities as per the committee programme; 3. Late or non-submission of information by departments undermines meaningful engagement during committee meetings and oversight visits; 4. Lack of responses from some departments or inadequate information remains a challenge.

Some Key Recommendations 1. Parliament should ensure that responses to Committee findings and recommendations are prompt. 2. Political Parties to consider not allocating Permanent Members of the SCOA as alternatives to other Committees. 3. Training of Members to be a central pillar for the Committee. 4. Money Bills Act to allow for sufficient time to consider the very complex finance issues. 5. The Committee should consider employing a focused approach to its mandate whereby members are allocated into different areas of key priorities of government to strengthen oversight.

Some Key Recommendations 6. Strengthen and enhance mutual beneficial partnerships with internal and external stakeholders such as Parliamentary Budget Office, Financial and Fiscal Commission, South African Local Government Association, National Treasury, Public Service Commission, Auditor General, Office of the Chief Procurement Officer, DPME and others. 7. The Committee to foster and maintain effective working relations with other Committees of Parliament concerning matters of common interest. 8. There is a need to strengthen the partnership with portfolio committees during the budget process. Portfolio Committees should be encouraged to make submissions to the Standing Committee on Appropriations of budget recommendations of their sector departments.

End……… Thank you