Public Sector Governance and Accountability Series: Budgeting and ...

516 Alta Fölscher
BOX 15.2 Examining Quality of Spending in Baselines
The format and instructions for budget submissions require spending departments
to illustrate how spending within the baseline has been reviewed and
how it will be reprioritized better to reflect departmental and government
spending objectives. Departments are required to illustrate the following:
How they will revise their baseline spending in line with revised strategic
priorities and programs
What significant trends can be identified in recurrent expenditure
How savings can be realized for reallocation to higher-priority departmental
activities
How actual spending compares with allocations
How spending programs have performed from a nonfinancial perspective
How additional allocations (new money to the department) over the previous
two years’ baselines have been used and whether the outputs and
objectives for which they were awarded have been achieved.
Departments are also required to detail their nonrecurrent expenditure,
indicating when projects will draw to a close and when funding will be
removed from their baseline.
Finally, departments are required to demonstrate how they will address
programs in which performance information is showing slow, inefficient, and
ineffective implementation.
Source: National Treasury of South Africa 2006c.
When evaluating policy options in order to advise the cabinet, the
National Treasury–led MTECs assess whether a clear link exists between
the department’s budget proposals and the government’s broad policy priorities
and key sector challenges, whether new funding is required and the
proposal can be accommodated in the baseline through reprioritization,
whether the department is able to implement the plan over the MTEF
period, and whether the expected outputs are clearly defined. Departments
are also required to illustrate how they will generate savings within their
baseline to fund new policy options.
Use of the contingency reserve
The contingency reserve is taken out of the funds available for other budget
spending before available revenue is divided between and within the spheres
of government. It is not a separate bank account accumulating funds over
years but a budgeting device that entails reserving a percentage of the available
funds in the budget as a cover against uncertainty and a pool from which to