OVERVIEW OF THE PRESENTATION Introduction Sources of SAMDI Revenue Graphic Presentation of Revenue by Source Background: SAMDI Brief Historical Background of Cost Recovery Aim of Cost Recovery Goals of Cost Recovery Status of Cost Recovery Graphic presentation of the Financial Status Challenges The Way Forward

INTRODUCTION SAMDI’s vision is: the creation of a self sustaining Organisational Transformation Centre of Excellence for Public Service Delivery

SOURCES OF SAMDI’s REVENUE

BACKGROUND: SAMDI Before 1994 training and development in the Public Service was provided by the Public Service Training Institute (PSTI), which was then changed to the South African Management Development Institute (SAMDI) Training and Development was offered free of charge by this body, and focused on technical skills In October 1999, SAMDI became a schedule 1 Department, with its own Director-General accountable to the Minister for Public Service and Administration.

BACKGROUND: SAMDI (continued) Concerns were raised that SAMDI should compete with other providers and not to enjoy monopoly like the PSTI –This concern is also reflected in the White Paper on Public Service Education and Training –The rationale was that competition would lead to quality service and programmes Cabinet then mandated SAMDI to embark on Cost Recovery

BRIEF HISTORICAL BACKGROUND ON COST RECOVERY Cost recovery strategy was initiated during 1999 National Treasury approved the Trade Account in 2001 National Treasury approved the initial tariffs in 2001 Shadow invoicing commenced during October 2001 Implementation of cost recovery from 1 April 2002 Tariffs amended in October 2002 (More market related)

COST RECOVERY Aim: To support SAMDI business through the recovery of costs on services rendered through fair and recognised outsourcing processes

GOALS OF COST RECOVERY Short Term To recover portion/part of costs Annually increase the portion of costs to be recovered Long Term To recover all costs( Break-even) To be sustainable

STATUS OF COST RECOVERY Total revenue – April 2002 to March 2003 – R Invoices issued to the amount of – R Total debtors outstanding – R Tariffs revised during October 2002 –Inclusion of consultation fees –Inclusion of professional management fees

CHALLENGES Implementation and monitoring of the Cost Recovery Strategy and Financing of training and development programmes –Willingness of departments to pay for services –Shrinking budget lines versus cost of training and development –Enforcement of payment for training and development services rendered –Expensive Leadership and Management Development Programmes – Cost of external service providers –Government priority programmes versus cost recovery

CHALLENGES Continue Aggressive marketing of SAMDI products and services to departments Systems for Cost Recovery –GAAP compliant, Booking, Invoicing, Certification and Weekly financial reporting Management of debtors Capacity to handle the number of invoices issued Capacity to handle the follow up of debtors To achieve an un-qualified audit report Access to skills development levy

THE WAY FORWARD The strategic plan for SAMDI Structure linked to the strategic plan Revisit the strategic marketing plan Consolidation of the funding structure

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