1. Standing Committee on Finance
Annual Budget Process
02 July 2014
Esther Mohube

2. Structure of the presentation
Annual Budget Process
What is a budget?
Legal Framework
Role Players in Budget Cycle
Budget Cycle
Where are we now?
Documents for budget oversight

3. Annual Budget Process
Purpose of the presentation is to give a broad overview of the annual budget process
A budget is:
A planning tool that translates policy into service delivery through the allocation of scarce resources.
The process of how revenue raised by national government will be allocated to national, provincial & local governments.
The budget is a process through which choices have to be made about competing priorities.
The budget can potentially act as a powerful tool for redistribution & development in society & can enhance the stability of the country’s economy.

4. Legal Framework
SA legal fiscal oversight framework comprises of the Constitution, PFMA, MFMA & the Money Bills Act
Constitution
Mandates Parliament or legislative organs of state to scrutinise & oversee Executive actions to ensure accountability
Oversight mandate: Sections 55, 92 , 114 & 133
Oversight processes: Sections 213, 214 & 215
Public Finance Management Act (PFMA)
Passed to regulate the financial management of both the national and provincial spheres of government
Objective is to ensure transparency, accountability & sound management of the revenue, expenditure, assets & liabilities of all public institutions.
Section 27 (1): The Minister must table the annual budget for a financial year in the NA before the start of the financial year
Section 27 (4): AO of each dpt. must submit to Parliament measurable objectives for each main programme in the department’s Budget Vote
Municipal Finance Management Act (MFMA)
Regulates local government finances
Objective is to ensure sound & sustainable management of the financial affairs of the local government sphere.

5. Legal framework (cont.)
The Money Bills Amendment Procedure & Related Matters Act
Provides for a procedure to amend money bills before parliament
Prior to 2009, Parliament could not amend Money Bills
Act was enacted in 2009 to give effect to the Constitution
Section 77 (3) of the Constitution…..“An Act of Parliament must provide for a procedure to amend money Bills before Parliament”.
Sections 4 & 15 of the Act provides for establishment of Finance & appropriations committees & the PBO, respectively
Committees on Finance must consider & report on:
Macro-economic and fiscal policy
Fiscal framework and revenue proposals
Reports on actual revenue published by NT
Section 10 (c) states that “the relevant members of Cabinet must table updated strategic plans for each department, public entity or institution, which must be referred to the relevant committee for consideration and report “.

6. Role players in the budget cycle
Portfolio Committees, Finance and Appropriations Committees, SCOPA
National and Provincial Departments
National Treasury
Auditor-General
Public Entities
Constitutional entities
Financial and Fiscal Commission
Civil Society
Parliamentary Budget Office

7. Budget cycle and milestones
December to February
SONA
National Budget
Budget Review
ENE
Fiscal Framework
March to August
Division of revenue Bill
Appropriation Bill
Updated SPs, APPs, Budget Votes
Mid-year continuous monitoring
Section 32 reports, Quarterly Expenditure and Performance Reports
September to November
BRRR Reports
MTBPS
Annual Reports

8. Budget Cycle (cont.)
SA uses a three-year rolling budget, the MTEF system that is informed by key government priorities, strategic plans of departments & the fiscal stance.
January, Cabinet Lekgotla discusses the government priorities for the next financial year
February, the President presents the SONA, the Minister of Finance introduces the National Budget.
March & June, Parliament passes the Division of Revenue Bill & Appropriation Bill. These bills confirm the allocation of funds to each vote.
September to November, the NA submits BRRR reports, adopts the fiscal framework & passes money bills.
BRRR provides an assessment of the department’s service delivery performance given available resources.
MTBPS sets out the budget policy framework for the next 3 years

9. Where are we now ?? As the peoples’ representative, Parliament:
Approves or amends the budget.
Ensures budget matches the nation’s needs with the resources available.
SCoF passed the fiscal framework in March 2014, The Appropriation Bill is currently before the SCoA
Now, the relevant Member of Cabinet must table the updated strategic plans for each department & public entity.
Budget Votes, SPs & APPs of NT, SARS and StatsSA will be tabled before the SCoF
These will then be referred to the Committee for consideration & reporting. Portfolio committees exercise oversight of service delivery performance of departments & entities
Committee should process these Budget Votes & report by 11 July 2014.

10. Documents for budget oversight
Key Government policy documents that are relevant:
State of the Nation Address
Sector relevant documents
National Budget documents
Division of Revenue Act of 2014
Budget Review
Estimates of National Expenditure (ENE)
Appropriation Bill
Minister’s speeches and presentations to committees
Updated Strategic Plans
Annual Performance Plans
Auditor General and SCOPA reports
Reports of other relevant institutions (FFC, DPME)

11. Thank You
THANK YOU