1. Oversight Role of Parliament and the provincial legislatures: Annual Reports
Presentation based on the Guideline for Legislative Oversight of Annual Reports

2. Background

3. The Constitution and Oversight
Section 55(2) says the National Assembly:
“must provide for mechanisms to ensure that all executive organs of state in the national sphere of government are accountable to it; and to maintain oversight of the exercise of national executive authority, including the implementation of legislation; and any organ of state.”
Section 92(3)(b) requires that:
“Members of Cabinet must provide Parliament with full and regular reports concerning matters under their control.”
Sections 114(2) and 133(3)(b) are the parallel provisions for provincial legislatures and the MECs

4. Recent Reforms Facilitate Oversight
PFMA provides financial management framework
focus on accountability through improved information
Better planning information
Strategic and Performance Plans
Clear performance measures and performance targets
Improved Budget documentation
Budget Review
Estimates of National Expenditure/Budget Statement Two
In-year monitoring information
Monthly financial reports
Quarterly performance reports
Improved end-year reporting
Detailed Annual Reports (with annual financial statements)
Available soon after end of financial year

5. Planing, Budgeting & Reporting Cycle
2004
2012
2006
2007
2008
2009
2010
2011
2005
2013
2014
2015
2016
Fiscal Years
5 Year Election Mandate
...
Election
Electoral Cycle
Planning & Budgeting
MTEF
Five-year Strategic and Performance Plans
5 year Strategic & Performance Plan
...
APPs
Annual Performance Plans and Budgets (with MTEF)
Budget Q1 Q2 Q3 Q4
In-year Reporting
Monthly Financial Reports
Quarterly Performance Reports MR AR
Annual Reports (with annual financial statements)
End-year Reporting
EPR
End-term Performance Reviews
Long-term Reporting
10yr
Ten Year Reviews

6. Annual Reports: closing the accountability loop
Departments produce Strategic Plans setting out performance measures and targets for the coming financial year
Through the Budget the executive indicates what funds are required to implement these Strategic Plans
The legislatures approve the Budget, and so appropriate funds for the implementation of the Strategic Plans
The Annual Reports indicate how the executive have used the appropriated funds to implement the Strategic Plans
The legislatures should exercise oversight of the Annual Reports to check whether the executive has performed acceptably and used the appropriated funds for the intended purposes

7. Part 1: Overview of Tabling and Oversight Processes

8. Overview of Tabling and Oversight Processes
Review of AG’s General Report
Timely tabling process
Late tabling process
Preparation Phase
Joint Workshops (provincial concurrent functions)
Report Writing Phase
Announcement of completion of tabling process
Annual Report
Tabling Processes
Referral to Portfolio Committees
Tabling of Oversight Reports
Ongoing Oversight Processes
Timeline
30 September
First two weeks in October
Third week in October
First week in November
Second week of November
Follow-up Phase
Referral to Public Accounts Committee
Annual Report Oversight Process
Portfolio Committee process
Public Accounts Committee process
Day of Delivery
Tabling of a weekly update of outstanding Annual Reports
Preparation of the Finance Bill
Before 31 March
Hearings Phase
Last week in October

9. Part 3: Roles in the Oversight of Annual Reports

10. Role of Portfolio Committees
Close accountability loop by exercising oversight of service delivery
Focus on the following:
(i) The technical quality of the annual reports
(ii) Whether reports cover all performance targets set out in strategic plans;
(iii) The quality of the performance information
(iv) The economy, efficiency and effectiveness of service delivery as measured by the performance indicators or by the AG in a performance audit, or by way of other information
(v) The equity of service delivery;
(vi) The implementation of the entity’s service delivery improvement plan;
(vii) Evaluating management’s explanations why service delivery was not in line with targets set in the strategic plans and budgets;
(viii) Investigating under- or over-expenditures, the impact on service delivery and the measures taken to comply with the Budget
(ix) Commenting on the Minister’s or MEC’s evaluation of the accounting officer’s performance, and the appropriateness of the performance bonus or sanction

11. Input by other role-players (1)
Auditor-General
Auditing of annual financial statements
Auditing of performance information
Performance audits of selected entities
Support for public accounts committees
Expert witness during oversight hearings
National and provincial treasuries
Annually prepare a Summary Guide to the technical requirements for annual reports’
Evaluate whether departments comply with technical requirements for annual reports
Programme officers available to participate in oversight hearings
Constitutional institutions
Provide inputs to the oversight hearings dealing with issues within their mandate

12. Input by other role-players (2)
National departments in concurrent functions
Produce a comparative analysis of the service delivery and financial performance of the nine provincial departments in the functional area
Departments with public entities
Produce an overview of the performance of the various public entities within the Ministers or MECs portfolio
Committee researchers
Be familiar with the challenges, policies and other developments
Review strategic plans, budgets, in-year reports and previous annual reports
Monitor developments in their area of focus on an ongoing basis
Talk to relevant treasury, auditors and other stakeholders
Stakeholders and the public
Request subject experts to evaluate entities’ performances

13. Part 4: Annual Report Oversight Process

14. Oversight preparation phase
Start preparations well before 30 September
Committee staff ensure:
members have access to all relevant documents
identify and contact subject experts for hearings
Members’ preparations:
read all relevant documents
review current year’s performance compared to outcome of previous oversight process
consult with subject experts and other stakeholders
prioritise issues and questions
Committee should meet prior to hearing to:
identify key issues
identify what they want to get out of the hearing
prioritise certain key questions

15. Oversight hearings phase
Hold hearings in period 15 to 31 October
Request Minister/MEC to give performance overview of the department and all public entities in portfolio
Options for structuring the oversight hearings:
1. A presentation by the Minister or MEC and/or the accounting officer and then a page-by-page review of the annual report
2. A presentation by the Minister or MEC and/or the accounting officer followed by a presentation by a designated member of the committee dealing with key issues as identified by the Committee, followed by a question and answer session
3. A presentation by the Minister or MEC and/or the accounting officer followed by inputs by invited experts or stakeholder organisations, followed by a question and answer session.
4. A presentation by the Minister or MEC and/or the accounting officer followed by a full-scale public hearing, followed by a question and answer session

16. Oversight report-writing phase
Each portfolio committee should prepare an Oversight Report for each entity they oversee
Oversight Reports should deal with:
Compliance with the tabling deadlines
Compliance with the technical requirements for annual reports
The usefulness of the General Information section
Comments on the entity’s reported performance
Comments on the entity’s human resource situation and policies
Key issues that the committee would like to draw to the entity’s attention as regards its performance
Recommendations in relation to any of the issues noted above

17. Tabling of Oversight Reports
Oversight Reports should be tabled in the House not later than 14 November or, at latest, before the December recess
In certain circumstances the House may consider debating certain issues contained in the Reports
Once accepted, Reports should be sent to the relevant Minister/MEC for response to resolutions

18. Follow-up phase
Legislatures need to put in place systems to manage and track resolutions
Aim of such systems
to bring resolutions regularly to the attention of Ministers and MECs
to ensure Ministers and MECs respond to resolutions
to ensure issues raised in resolutions get resolved

19. Part 5: Interrogating & Evaluating Annual Reports

20. Aim of Portfolio Committees’ Oversight
Clear understanding of purpose of oversight helps to achieve objectives
Fulfil constitutional obligation to hold executive accountable
Ensure departments and public entities are:
producing high quality services, economically, efficiently and effectively
complying with constitutional and/or legislative mandates, strategic plans and budgets
contributing to the realisation of government’s objectives
Gather information on the views of customers and clients
Make recommendations on improving the quality and responsiveness of services

21. Preparing to exercise oversight
The oversight process is about the legislature exercising oversight of the executive in accordance with the Constitution It is NOT about opposition parties exercising oversight of government

22. Oversight of technical quality of Annual Reports

23. Aim of overseeing technical quality
To check that entities’ annual reports comply with the legal and policy frameworks for:
the structuring of the annual reports
the compilation of information
tabling of annual reports

24. Necessary background information
Guide for the Preparation of Annual Reports issued by National Treasury
Familiarity with the technical terms and methods used to
describe service delivery performance
esp. economy, efficiency and effectiveness
describe human resource issues
Strategic plans and budgets for the entity

25. Typical technical focus questions
(i) Was the report delivered on time?
(ii) Is the report in line with the prescribed formats?
(iii) Does the layout of the report facilitate understanding?
(iv) Is the information communicated simply and clearly?
(v) Is the report original, or are key portions copied from previous reports?
(vi) Does the report deal faithfully with each aspect of the strategic plan?
(vii) Is each measurable objective specified in the strategic plan reported on in the report?
(viii) Is the service delivery information presented in the report reliable?
Are the performance measures robust?
Can the performance information be verified?
Can the human resource information be verified?
(ix) Was an excessive amount spent on the production of the annual report?

26. Oversight of entities’ performance

27. Aim of overseeing performance
· To test whether the annual report is an accurate record of the entity’s performance
· To evaluate whether the reported performance is in line with entity’s strategic plans and budgets
· To evaluate whether performance is acceptable given the operating environment
· To assess how the entity might improve on its performance in future
Focus is on:
How can [name of entity] deliver services better in future?

28. Necessary background information
Information on the entity
its mandate,structure, way of operating, strengths and weaknesses
The entity’s strategic plan and budget
Information on external and internal challenges faced by the entity
Information from clients

29. Organisational concerns and options
1. How effectively does the entity contribute to the delivery of government objectives, as reflected in its mandate?
2. Should the mandate be changed to better reflect the priorities of government, and the needs of clients?
3. Is there a continuing need for the functions being delivered by the entity as a whole, and by each of its programmes?
If not, can the entity be closed down, or certain of its programmes be terminated?
4. Is there a need for new programmes?

30. Evaluating Past Performance
1. Is the annual report transparent about the entity’s performance?
Or is it simply a public relations document?
2. Has the entity met its aims, objectives and performance targets and quality standards?
What were the reasons for any failures?
3. Have the entities performance targets changed over time?
Are targets increasing with increases in funding?
4. Are there examples of good practice in how the entity has delivered its services?
5. What changes have been made in the services provided to clients?
How can greater client choice be provided in future?
6. What are clients’ views on the nature and quality of services?
Have these views altered over time?

31. Evaluating Efficiency of Performance
1. Are there systems to identify clients’ needs and monitor the extent to which they are met?
2. Has the entity delivered value for money?
Over time, is it delivering its outputs at reduced cost?
3. Has the entity been innovative in managing costs and improving performance?
What steps has it taken in this regard?
Is there any scope for increased efficiency savings?
4. Are staff hampered by internal bureaucracy?
What has been done to encourage greater flexibility and creativity in delivering services? What can still be done?
5. How effective have the relationships with other entities operating in the same or related areas been?
6. Have service delivery risks been managed adequately?
7. Does the entity comply with the Access to Information Act?

32. Developing effective partnerships
1. What links does the entity have with other organisations?
2. What reasons has the entity given for being involved in its current partnership(s)? How persuasive are these?
3. Has the entity reviewed its partnerships?
4. How does the entity measure whether its partnerships are contributing positively to the realisation of its objectives?
5. What do the entity’s partnerships cost it?
To what extent are these costs justified by the benefits that the partnership delivers?
6. Where could the entity develop further joint-working arrangements with other bodies to enhance the efficiency and effectiveness of service delivery?

33. Making better use of new technology
1. To what extent is the entity’s management aware of the development of the government’s IT strategy and acting in accordance with it?
2. How can the entity make better use of new technology to improve the delivery of its services and functions?
3. To what extent has the entity ensured that all its staff have adequate IT training and can make full use of its systems?
4. If an entity has decided to use IT in new ways, has it ensured that it has an adequate statutory basis for any new use of personal data?

34. Human resource development
1. Has progress been made with the implementation of the Service Delivery Improvement Plan?
Is there evidence that services are improving as a result?
2. What has been done to fill key vacancies?
What more can be done?
3. What progress has been made with employment equity?
What strategies have been adopted to promote greater equity?
4. What is the status of the skills development programme?
Is the programme making a difference to staff’s ability to deliver services?
5. How much was paid out in performance bonuses?
How much did the accounting officer and other senior managers receive as performance bonuses?
Are these rewards in line with the entity’s delivery performance?
6. How many disciplinary matters are outstanding?
What is the age profile of these complaints?
What is the entity doing to ensure the speedy conclusion of matters?
7. How many senior management posts do consultants fill?
How will the entity reduce its reliance on consultants for routine functions?

35. Any Questions?