1. Presentation to PCOF of Annual Report 2003/04 7 October 2004
NATIONAL TREASURY
Presentation to PCOF
of Annual Report 2003/04
7 October 2004
National Treasury

2. Outline Highlights of achievements in 2003/04
Audited financial statements
Measurable objectives & output targets by programme
National Treasury Human Resource Planning

3. HIGHLIGHTS OF ACHIEVEMENTS IN 2003/04

4. Key Macro Highlights (1)
2003 was entered with considerable grounds for optimism that the foundation for growth and development was now firmly in place
Economy recovered from the currency volatility of 2001
Growing consumer and investor confidence
Low interest rate environment
Low inflation
Currency stability
Strong investment performance and healthy capital inflows
Government debt fell to 38.5% of GDP by end of the 2003/04 finacial year
Debt-servicing costs decline to 3.9% of the GDP

5. Key Macro Highlights (2)
Lower interest rates have improved growth prospects
Fiscal policy remained expansionary, within the sustainable framework provided by sound management of state finances
Strong growth in social spending and infrastructure investment
Increased capital expenditure by non-financial public entities
Sovereign ratings continue to improve

6. Key Budget Highlights (1)
Key Ongoing Budget and fiscal reforms – alignment of policy priorities & departmental plans with avaiable resources
The 2003 Budget intoruced measurable objective
Departments now table three year strategic plans
Service delivery progress is now reported on in departmental annual reports, completing the accountability cycle

7. Key Budget Highlights (2)
New economic format and standard chart of accounts finalised March 2004
Improved financial reporting formats
IGFR published April 2003
MFMA enacted February 2004

8. Key Budget Highlights (3)
Extension of amnesty for undeclared foreign assets
Publication of the Mineral and Petroleum Royalty Bill
Supply Chain Management Framework promulgated Dec 2003

9. Key International Highlights
SA’s International economic relations continues to strengthen
Africa’a economic intergration through NEPAD remain a key focus
Provide technical support for the creation of the African Peer Review Mechanism
Hosted conference of African Finance Ministers , March 2004

10. AUDITED FINANCIAL STATEMENTS

11. Annual financial statements 2003/04
Submitted annual financial statements for 2003/04 to the Auditor-General and Treasury on 31 May 2004
Fully complied with predetermined format
Unqualified Audit report issued on 23 July 2004

12. Annual financial statements 2003/04 (continued)
Annual appropriation R12,593 billion (total saving of R499,2 million surrendered to NRF)
Departmental revenue R2,131 billion
Local and foreign aid received in cash R7,1 million
Operational budget R714,3 million (Saving R187,6 million – R43 million on personnel and R114,3 on professional and special services)
R419,3 million rolled over from 2002/03

13. Audit Report Unqualified audit report
Emphasis of matter relates to control over medical expenditure
No other significant/material findings

14. MEASURABLE OBJECTIVES AND OUTPUTS PER PROGRAM

15. Prog 1: Administration
Purpose: To provide political and managerial leadership, strategic management and administrative support to the National Treasury.
Sub Programmes: Ministry; Deputy Minister; Management and Corporate Services.
Corporate Services comprises:
Financial Management including Procurement;
Legal Services;
Human Resources Management;
Information Technology;
Communication; and
Facilities and Security Management
All targets were met except for implementation of procurement reform which is in progress

16. Prog 2: Economic Planning and Budget Management
4 sub-prog: Budget Off, Public Fin, IG Relations, EPIFR
BO met or exceeded 9 of 10 targets
PPP sub-prog met 7 of 10 deals
PF met 3 targets, 1 partially met
IG met all 6 performance targets
EPIFR met its targets
Scope was expanded by about 20%
A number of unanticipated activities had to be dealt with within the year

17. Prog 3: Asset & Liability Management
Manage government’s financial assets & liabilities
5 sub progs: management; liability mgt; fin ops; strategy & risk mgt; asset mgt.
Most objectives met in prog.
Objectives not met include:
Transnet end state
Eskom and Transnet housing book
Armscor – disposal of non core assets

18. Prog 4: Specialist Functions
Manage supply chain process & maintain standardised fin systems
3 sub progs: supply chain mgt; PFMA impl; Financial Systems
All objectives met, one only partially:
Sourcing strategy for 20% of term contacts partially met

19. Prog 5: Office of the Accountant General
Manage accounting policies and practices in public sector
4 sub programmes: national accounts; fin mgt improv; service charges & audit
5 of 7 objectives met
Other 4 met after end of fin year incl:
Formats for annual statements
Compliance with internal audit framework

20. Prog 6:Provincial and LG transfers
Covers 3 conditional grants administered directly by NT
Does not cover Equitable Share transfers to provinces (Prog 2), or ES to LG (dplg)
2 sub-programmes covering 3 grants
Provincial Infrastructure Grant, LG Fin Mgt Grant, Restructuring Grant
Refer to Annex 1A and 1B in notes on fin statements for grant per province and municipality
All three performance targets met
Performance related to framework, transfers, not spending
R45 mil not transferred to Mangaung, due to non-compliance on Restructuring Grant

21. Prog 7: Civil & Military Pensions
Provide pension and medical benefits to former employees of gov depts
2 sub progs: civil pensions and medical schemes; military pensions
All 5 objectives met
Audit reports raised issues of controls – discussion due in Audit Committee

22. Prog 8: Fiscal Tranfers Fiscal Transfers Foreign transfer payments:
CMA; HIPC (IMF); ADB & Commonwealth fund for tech assistance
Provides funds to other public authorities and institutions:
SARS,DBSA,NIA,FIC,FFC

23. BUDGET vs ACTUAL Programme Budget R’000 Actual Saving Prog 1 111890
90408
21482
Prog 2
125263
106436
18827
Prog 3
69831
51867
17964
Prog 4
343950
234313
109637
Prog 5
63323
44717
18606

24. NATIONAL TREASURY’S HUMAN RESOURCES PLANNING

25. National Treasury Organisation
Appointment of DG – Feb 2004
Finalisation of new structure and absorption of staff ( Res. No 7)
Implementation of new performance management and personnel development systems
Education, Training and Development Strategy implemented

26. National Treasury Organisation
Launched successful internship programme
To address the vacancy gap, created by Resolution 7, appointments were made additional to the establishment
Financial management focus on PFMA resulted in an Unqualified audit
Audit & Risk Committees are functioning in accordance with their terms of reference

27. National Treasury Organisation
Personnel Information:
Total posts: 859
Filled posts: 488
Vacancy rate: 43%

28. EMPLOYMENT AND VACANCIES  Employment and vacancies by programme, 31 March 2004
Number of posts
Number of posts filled
Vacancy Rate %
Number of posts filled additional to the establishment
Programme 1
193
145 25 33
Programme 2
321
194 40 35
Programme 3 80 50 38 3
Programme 4
201 79 61 8
Programme 5 64 20 69
Total
859
488 43

29. Filled Positions

30. Position per Salary Band

31. Staff Turnover

32. Employee Profile

33. Staff Development

34. Internship Programme Profile 2003/2004

35. Conclusion National Treasury measurable objectives largely been met
Currently engaged in development of new strategic plan

36. Thank you