1. IN YEAR MONITORING & BUDGET PREPARATION WORKSHOP PREPARED BY BUDGET OFFICE 27- 29 MAY 2014 1

2. PRESENTATION OUTLINE  Purpose  Introduction  Legislative Framework  Budget Process Cycle  Budget Planning process  Road Map  Conclusion 2

3. PURPOSE  To provide guidance to sub-programmes on how the budget process will unfold in the current year  To provide guidelines on how the budget for 2015/16 MTEF will be prepared and the roles and responsibilities of all affected parties in the department..

4. INTRODUCTION  Budgets form the plan according to which the different resources available to the department are allocated in order to achieve its goals  Each Directorate or Programme needs to ensure that priorities are funded  Senior staff should understand the budget, how it has been developed and further implement and monitor progress.  Budget office will co-ordinate and consolidate budget for the department  Budget office provides financial guidance, exercise financial management and control to ensure the department spends within its mandate and budget  Budget Office will continue assisting Directorates by doing working sessions.

5. LEGISLATIVE FRAMEWORK  Public Finance Management Act of 1999( PFMA)- provide direction on the management of state resources  Treasury Regulations - provide details to the management of state funds & resources  Division of Revenue Act (DORA)- provide details on the budget laws & appropriations  Treasury Circulars – provide guidelines on processes to be followed

6. BUDGET PROCESS CYCLE

7. BUDGET PLANNING PROCESS 1.Review past performance, in terms of impact, effectiveness and efficiency. 2.Review & identify the resources required to meet the needs of the department in that particular year.  Personnel Cost ( Compensation of Employees)  Operational Cost ( Good & Services)  Capital Expenditure  Transfers & Subsidies ( Transfers to mun/bursaries/ gratuities)

8. HOW TO CALCULATE FOR RESOURCES REQUIRED Costing of Compensation of Employees  Identify the no of people needed for the implementation of plans  Costing of current personnel (considering annual increment as per the guidelines)  Cost for the vacant posts ( replacements)  Review the indicative budget allocation to check adequacy of budget for the implementation of plans.  If funding is not adequate to meet your targets, revise the target to meet the resources available.

9. HOW TO CALCULATE FOR RESOURCES REQUIRED Costing of Goods and Services  Identify funds to each performance indicator e.g. number of reports submitted to Treasury as per PFMA and Treasury Regulations, Practice Notes and Treasury Circulars  Identify the activities that are to be performed for the achievement of targets  Conduct sessions with Programme regarding the preparation of budget  Identify and cost for all resources needed e.g. venues and facilities,stationery etc.  Directorates should make use of SCOA list in allocating funds  Budget for Accruals and at least 3% for Ad-hoc ( refer to Costing Sheet)

10. HOW TO CALCULATE FOR RESOURCES REQUIRED Costing for Capital Expenditure  Identify the capital assets needs of the department (e.g. Furniture, Machinery & Equipment, Laptops etc.)  Submit the list of all the needs to SCM and DGITO  The SCM /DGITO perform an assessment of the needs, condition and present report to the Governance Committee  Based on recommendation by the committee the SCM or DGITO will implement  Infrastructure assessment must be conducted in order to determine what to be done Costing for Transfers to municipalities  Costing is based on the assessment of what will be done for the municipalities  Reprioritization to assist the most deprived municipalities is recommended  Previous years performance of municipalities should be considered

11. CHALLENGES RECOMMENDATIONS Poor planning by Directorates which result to late submission of information Adhere to time frames Shifting of funds in the first quarter Plan properly to avoid this e.g. Budgeting for accruals Follow up on commitments Non Alignment of budget to plans resulting in inability to report Ensure that every resource requirement is budgeted for Credibility of the cash flow projections Involvement of Project Managers in crafting the budget Quality assurance of information submitted to Budget office Final budget documents thoroughly checked and signed off by Responsible Managers

12. ROADMAP FOR 2015/16 FINANCIAL YEAR BUDGETING PROCESS

13. DRAFT BUDGET PROCESS SCHEDULE - 2014/15 FINANCIAL YEAR TIMEFRAMEMILESTONESCRITICAL DATESACTIVITIES April 2014Request roll-over inputs from programmes7-Apr-14Programmes submit roll-over requests Submit roll-over Application to PPT30-Apr-14 June 2014Issue 2015/16 Budget Preparation Document to Programmes 09 June 2014Programmes analyze plans against budget Programmes commence budget costing Finalization and signing off costed budget23 - 26 June 2014 Programmes submit a final costed budget and signed off at the venue July 2014Request inputs from HRM,HRD,M&E,Disaster Management, Trad. inst Supp and Strategic Planning 07 - 10 July 2014 Relevant offices submit the following information:- - Personnel Numbers - Information on Training - Infrastructure Plans - Non Financial Information

14. DRAFT BUDGET PROCESS SCHEDULE - 2014/15 FINANCIAL YEAR TIMEFRAMEMILESTONESCRITICAL DATESACTIVITIES SeptemberRequest Programme to submit inputs to the Adjustment Estimate process 3 September 2014 Analyze current budget against plan/Identify virements - Submit inputs to Budget Office Attend Provincial MTEC Hearings19 - 23 September 2014 All Programme Managers attend MTEC Hearings at Treasury February 2015 Cash flow template issued to programmes 11 February 2015 Programmes attach timelines to the costed activities Programmes submits cash flow to budget office 18 February 2015 Programmes submit a final signed annual cash flow projections to budget office March 2015Budget loading commences 06 March 2015 Budget loading completed 27 March 2015 Copies of reports circulated to programmes for sign off 24 March 2015 Programmes check loaded budget report and notify budget office of any corrections April 2015Implementation of Plans 01 April 2016 Programmes start spending

15. CONCLUSION  Directorates must clearly derive the implementation strategies and plan properly before the finalisation of budget to avoid delays in implementing its projects.  Directorates should also work closely with the strategic Planning Unit in ensuring that the budget is aligned with the strategic documents  All Directorates should prioritize the budget process, budget office is just the coordinator and the budget belongs to the each directorate

16. Lets face 2015 MTEF budget with more determination and commitment “ Coming together is the beginning, Staying together is progress, working together is success’’ Henry Ford “ Coming together is the beginning, Staying together is progress, working together is success’’ Henry Ford THANK YOU