1. Presentation to Portfolio Committee on Finance - 8 May 2001
National Treasury
Presentation to Portfolio Committee on Finance - 8 May 2001

2. Aim
The National Treasury aims to promote economic development, good governance, social progress and rising living standards through accountability, economy, efficiency, equity and sustainability in the public finances

3. Key objectives
Advance economic growth, employment and income redistribution
Sound and sustainable national budget and equitable division of resources
Raise revenue required equitably and efficiently
Sound management of State’s financial assets and liabilities
Promote accountability through financial reporting, systems and controls

4. National Treasury - structure
PIC
Director-General
Pensions
Ncedo Mlamla
Maria Ramos
Frans le Roux
Budget Office
Intergovernmen-
tal Relations
Accountant-
General
Andrew Donaldson
Ismail Momoniat
Ismail Mamoojee
Public Finance
Economic Policy &
International Relations
Asset & Liabi-
lity Management
Andrew Donaldson
Lesetja Kganyago
Brian Molefe
Specialist
Functions
Corporate
Services
Coen Kruger
Simone le Hane

5. International and domestic relations
SA Revenue Service
Development Bank of SA
SA Reserve Bank
Financial Services Board
FOSAD clusters
Budget Council
National Treasury
Provincial Treasuries
National Departments
International Monetary Fund
G20 forum
African Development Bank
World Bank

6. Strategic overview: policy objectives
Economic policy and financial oversight
Growth-oriented fiscal stance
Sound financial regulation & consumer protection
Budget reform
Strengthened MTEF process
Improved intergovernmental cooperation
Establishment of PPP Unit
Tax policy and revenue management
Broadening of tax base
Tax system modernisation and law reform

7. Strategic overview (cont.)
Debt management aimed at reducing debt service costs in long-term
Asset management
coordination of public enterprise borrowing
contribution to state asset restructuring process
broader oversight of cash management
Strengthened international relations
participation in financial reform initiatives
international debt reduction
African and regional economic development

8. Strategic overview (cont.)
PFMA implementation
legislative amendments & revision of regulations
modernisation of reporting, accountability & controls
Financial management reforms
Overhaul of government procurement processes
Acquisition of new financial systems
Establishment of Accounting Standards Board
Support & monitoring of internal audit
Development of accounting policies
Consolidation of financial statements

9. Key publications Budget Review Estimates of National Expenditure
Intergovernmental Fiscal Review
Medium Term Budget Policy Statement
Guidelines:
Guide for Accounting Officers
Treasury Guidelines for budget submissions
Public-Private Partnership Guidelines

10. Vote 7

11. Amounts to be voted: operational budget & transfers

12. Estimate of Expenditure Operational budget
VOTED BUDGET Increase/
Programmes / / (Decrease)
R’ R’ %
1. Administration (33)
2. Expenditure planning
and budget management
3. Asset and liability management
4. Procurement management
and financial systems
5. Financial accounting and reporting (514)
10. Auxiliary and associated service
Total operational budget (9)

13. Estimate of Expenditure (Transfers and related)
VOTED BUDGET Increase/
Programmes / / (Decrease)
R’ R’ %
6. Fiscal transfers
7. Civil pensions and contributions
to funds
8. Military pensions and other benefits
9. Provincial and local government
transfers (17)
10. Auxiliary and associated services
Secret services
Audit (80)
Investment of public moneys
Total (0.14)

14. Estimate of Expenditure
VOTED BUDGET Increase/
STANDARD ITEMS / / (Decrease)
R’ R’ %
Personnel expenditure
Administrative expenditure
Inventories
Equipment (190)
Professional and special services
Transfer payments (4)
Miscellaneous
TOTAL (1)

15. National Treasury - employment

16. Restructuring of National Treasury
Strategic plan
Structure to be finalised
Staff consultation
Absorption framework
Employment Equity
Employee Assistance Programme
Education Training & Development

17. Programme structure 1 Administration
2 Economic planning & budget management
3 Asset & liability management
4 Procurement management
5 Financial systems & reporting
6 Fiscal transfers
7 Civil pensions & contributions to funds
8 Military pensions & other benefits
9 Provincial & local government transfers
10 Auxiliary & associated services

18. Administration (programme 1)

19. Corporate service functions
Communication
Branding of National Treasury
Annual Report and Website
Focus on external stakeholders
Refocus on internal communication - ethos of National Treasury
Information technology
Call centre and infrastructure

20. Corporate services (cont.)
Financial management
Implementation of PFMA
Procurement reform
Audit Committee appointed
Internal Audit unit outsourced
Legal services
Legal advice & drafting; management of litigation

21. Economic planning & budget management (programme 2)

22. Economic planning & budget management - policy priorities
Budget reform: service delivery information
Promotion of growth, employment & redistribution through sound public policies
Financial regulatory reforms: stability, efficient markets, consumer protection
Strengthening infrastructure investment
Promotion of sound public-private partnerships

23. Economic policy & budget management (cont.)
Equitable allocations to provinces & local government
Improved intergovernmental financial arrangements
Sound management of international development cooperation
Promotion of international & regional financial cooperation

24. Economic policy & budget management - outputs
Macroeconomic & international financial policy advice
Financial policy & regulatory advice
Tax policy
Sectoral & departmental policy advice
Budget framework & division of revenue
Budget documentation
PPP agreements
International cooperation agreements
Framework for provincial & local grants

25. Asset & liability management (programme 3)

26. Asset & liability management - priorities
Meet annual borrowing requirement
Manage foreign and domestic debt portfolios
Restructuring and financial management of state assets
Sound cash management

27. Asset & liability management - objectives & outputs
financing at favourable terms
contribute to development of the bond market
broaden and improve the international investor base
minimise long-term debt cost, subject to acceptable risk
efficient operational support

28. Asset & liability management - objectives & outputs
Asset management
advise on restructuring of state assets
promote principles of sound corporate governance
manage risk exposure of Government arising from public enterprise borrowing & activities
resolve financial problems in SOEs
improve government cash management

29. Procurement management, systems & reporting (programmes 4 & 5)

30. Procurement management, systems and reporting - priorities & outputs
Procurement & moveable asset managemnt
Phase out State Tender Board
Preferential procurement regulations
Procurement reform implementation
Monitor & support PFMA implementation
Financial systems
Maintain, support & enhance systems
Identification of integrated financial systems to support new accounting requirements

31. Procurement management, systems and reporting - outputs (cont.)
Financial reporting
Monthly reporting (PFMA sect 32)
Monthly & annual consolidated statements
Introduction of new format financial statements
Establish Accounting Standards Board
Define “generally recognised accounting practice”
Administration of NRF and RDP Fund
Improve departmental banking services
further extend electronic funds transfer

32. Procurement management, systems and reporting - outputs (cont.)
Financial management
Establish internal audit in national & provincial departments
Financial management performance measurement system
Implement management information system
Training and skills development
On the job training programmes for financial staff
Assistance to IPFA

33. Fiscal transfers (programme 6)

34. Fiscal transfers - key outputs
SA Revenue Service
Establish 6 processing centres by 2002
Ongoing efficiency improvements
Internal restructuring (“Siyakha”)
Campaign against tax fraud
FFC advice & recommendations
CMA payments to Lesotho and Namibia
Contributions to international debt relief and ADB Development Fund

35. International strategic themes
Regional integration
monetary & fiscal coordination in SADC and SACU
Understanding & promotion of capital flows
Securing finance for development projects in Africa
Supporting HIPC debt relief
Promoting interests of developing countries in international trade

36. Civil and military pensions and other contributions (programmes 7 & 8)

37. Civil and military pensions & contributions to funds
Outputs are payments in accordance with relevant legislation & agreements
Contributions to post-retirement medical benefits main expenditure item
Policy developments
Improved operational competencies
Client service improvement plan
PFMA implementation and GAAP compliance
Improved management of contributions & membership

38. Provincial and local government transfers (programme 9)

39. Provincial grants - policy developments & outputs
Provincial supplementary grants
Promotion of compliance with PFMA
Realistic and credible budgets
Pilots for hospital management reform
Consolidation of financial management & planning grants
Infrastructure grants
Flood reconstruction
Rehabilitation of roads, schools, clinics, rural infrastructure

40. Local government grants - policy and outputs
Restructuring grant
Modernisation and restructuring of large municipalities
Credible and sustainable budgets
Financial management grant
Three-year budgeting in local sphere
GAMAP: new accounting standards
Financial management reforms
Division to approved pilots & roll-out plan

41. Auxiliary and associated services (programme 10)

42. Auxiliary and associated services - process & outputs
Financial transfers to SASS, NIA & SAPS
Transfer payments in line with approved budgets
Accountability rests with agency heads
Service charges provides for bank charges
Audit provides for shortfalls of statutory bodies & municipalities in respect of Auditor-General charges

43. Public Investment Commissioners - Budget

44. Key objectives of the PIC
Upgrading professional asset management capacity
Integration of national economic priorities more fully into investment profile
Review of restructuring / integration with GEPF
Compliance with Employment Equity Bill

45. Investment profile 31 March 2000 (at book value)

46. Conclusion: Main changes to baseline
Increase in SARS allocations
Provision for Financial Intelligence Centre
Increases in local government grants
Merging of smaller provincial capacity-building grants into supplementary grants
Adjustment to Secret Service allocations
Termination of allocation for computer service (SITA)