1. Budgetary Review and Recommendation Report Template Presentation to the Portfolio Committee on Energy Mkhethwa Mkhize Unit Manager: Committee Section 11 October 2011

2. Background Section 77 (3) of the Constitution:
“All money Bills must be considered in accordance with the procedure established by section 75. An Act of Parliament must provide for a procedure to amend money Bills before Parliament”.
Promulgation: The Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009 (the Act).
Specifically: Section 5 of the Act.

3. Background… Section 5 of the Act provides that:
The National Assembly, through its committees, must annually assess the performance of each national department.
Content:
Estimates of expenditure, strategic priorities and objectives (national budget process);
Prevailing strategic plans;
Section 32 reports of the PFMA
Annual report and financial statements
Reports of SCOPA
Any other information

4. Background…
Committees must annually submit BRRR for tabling in the National Assembly.
BRRR to be submitted to the Finance Minister and Cabinet Member of a Vote.

5. Cover Page [Template] Portfolio Committee on Energy
Budgetary Review and Recommendation Report
Calendar Year
Name of the Chairperson

6. Content Page [Template]
Introduction
Strategic Priorities and Objectives
Analysis of Strategic and Operational Plans
Analysis of Annual Report and Financial Statements
Consideration of SCOPA’s Reports
Consideration of Other Information
Conclusion
Recommendations

7. Introduction The Committee: The Mandate of the Committee
Methodology used to compile a BRRR
The Department:
The Mandate of the Department, including its vision and mission statement

8. Strategic Priorities and Objectives
Recall that Performance Assessment comprises of:
Performance measurement, and
Performance evaluation.
Strategic priorities
a summary of strategic priorities, with a view to use them as a threshold level.
Measurable objectives
a summary of measurable objectives, with a view to use them as a threshold level.

9. Analysis of Strategic and Operational Plans
Evaluate strategic and operational plans against outcomes of the Department (service delivery performance).
The Committee may invite inputs and/or evidence from the Department and other stakeholders.

10. Analysis of Section 32 Reports
Section 32 of the Public Finance Management Act provides for the publishing of reports on the state of a vote’s budget.
Publishable by National Treasury.
Spending patterns (identifying under- or over-spending).
Consider Spending Trend Analysis (STA) by National Treasury (for committees’ purposes only –not for public consumption).

11. Section 32 reports… STA includes spending trend per budget vote.
STA provides analysis on a number of variables.
STA’s variables are provided per Dept’s programme and sub-programme.
May supplement this section with ST on Appropriations’ reports on quarterly spending by certain departments.

12. Analysis of Annual Report and Financial Statements
Annual report and financial statements must be tabled, latest, at the end of September.
In October (or earlier), the Committee reports on annual report and financial statements.
This process coincides with BRRR.
Recommended: BRRR should subsume a report on annual report and financial statements.

13. Annual report and financial statements…
The success on the analysis of the annual report and financial statements in highly dependent on the timely submission of these source documents.
Advice: Ministries are encouraged to submit these documents as early as possible.

14. SCOPA’s Reports
The Act provides that committees must consider SCOPA’s reports on departments’ annual reports.
To verify existence of:
Fruitless and wasteful expenditure,
Irregular expenditure,
Over-spending, and
Unauthorised expenditure.
The Committee may invite additional comments from SCOPA.

15. SCOPA’s Reports…
Challenge: Not all departments’ annual reports for the most recent financial year may have been reported on by SCOPA -due to the workload.
Advice: For SCOPA to prioritise departments’ reports and consider entities at a later stage (this is another reason for the submission date of annual reports to be earlier as per recommendation on slide 13 above).

16. Other Sources of Information
Other useful sources of information may include:
The State-of-the-Nation Address;
Reports of the NPC and Ministry: Performance Monitoring & Evaluation;
Reports of the Auditor-General South Africa;
Recommendations of the Financial and Fiscal Commission;
Fact-finding (or oversight) reports;
Prior BRRRs;
Reports on Budget Votes.

17. Committee’s Findings
The Committee to summarise key findings in a coherent and logical format.
Key findings to be based on analyses made above (not unacceptable sources).

18. Conclusion
Based on its findings (that is the “achievement” of strategic priorities & objectives of the Department and the efficient, effective and economical use of both monetary and non-monetary resources), the Committee should make a clear statement on whether it is satisfied with the department’s service delivery performance or not.
This statement could be per programme or sub-programme (or project).

19. Recommendations The content of the recommendations should conform to:
The Constitution of the RSA.
The principle of separation of powers.
The principle of cooperative governance.

20. Recommendations… Equally important, recommendations should be: Clear
Who they are directed to
What action is expected
Practical
Reasonable/achievable action is expected.
With timeframes
Realistic timeframes.

21. THE END Thank you! Mkhethwa Mkhize