Review 3 final 2 - TAU - National Treasury

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TECHNICAL ASSISTANCE UNIT REVIEW | The Reality as well as the Buzz The Layers and Levels of constitutionally guaranteed governance A Board: (Independent Regulator) The Board has absolute responsibility and accountability for the achievement of the public entity’s translation of government strategic objectives into performance, supported by: • The Public Finance Management Act (PFMA) • The Protocol on Corporate Governance provides the Boards with guidance in establishing governance principles regarding the roles and responsibility of Public Entities. • (Highly recommended) The major recommendations of the Code of Corporate Practices and Conduct as set out in the King II Report (the updated version King III will becomes effective 1 July 2010) on Corporate Governance. The Executive-Setting the Agenda Government, at the level of Cabinet, provides the overall policy direction for PEs and for their strategic direction with regard to their contribution to economic growth and service delivery. The Executive Authorities are responsible for reporting on Public Entities to Parliament, appointing board members and shareholder’s compacts, which further includes agreements on outputs (i.e. key performance indicators), instructions on public projects, execution of mandate and review of Public Entities’ corporate plans The Legislature: Constitutional Oversight According to the Constitution of South Africa, the National Assembly and Provincial Legislatures are empowered with oversight powers over their respective executives. Parliament exercises its role through evaluating the performance of Public Entities through the Standing Committee on Public Accounts (SCOPA) which reviews the annual financial statements and the audit reports of the Auditor- General; and the Portfolio Committee exercises oversight over the performance (non-financial elements) of Public Entities with a focus on service delivery and enhancing economic growth. The Public: Citizen Oversight One cannot look at governance of public institutions without interrogating the role, or potential role that society has to play. Public institutions are put in place to meet the needs of the citizens of a country. Citizens should not only exercise their displeasure with public institutions through the ballot alone. They have the right to question the strategic direction and operation of public entities. This can be done through “organised” entities such as NEDLAC, which emphasises the importance of robust labour unions and non-governmental organisations who also play an oversight role. 14 page Enabling change for development
TECHNICAL ASSISTANCE UNIT REVIEW | A Government with a Strategic Centre’ A Government with a Strategic Centre: The Role of Expenditure Reviews Exploring the Debate Her visit was supported by the Australia High Commission and The Foundation, a non-governmental organisation that promotes institutional strengthening in government. Dr. Kelly has a suitable track record to provide considered opinions on these matters. A leading paper, authored by her, entitled “Slaughtering the Sacred Cows”, provides an examination of budget reallocation and expenditure review in five countries. She also wrote the Report “Shaping a Strategic Centre” which contributed to the Australian review of public administration. In recent years, the focus on spending has shifted away from spending rates to quality of spend, especially in terms of service delivery. Are citizens getting optimal services from the budgets so allocated for their respective purposes As government systems mature, under-spending of budget allocations is less substantial, particularly among national and provincial departments and entities. Notwithstanding this welcome development in our maturing democracy, under-spending is still a concern in South Africa’s infrastructure-related programmes especially at the sphere of Local Government. According to the 2011 Budget Review, National Departments, in total, underspent by 1.1 percent; while Provinces, as a whole, overspent by 0.5 percent in 2010/11. Municipalities experienced significant challenges with an underspend of R16,7 billion. In line with the TAU’s objective to provide strategic and technical management assistance to improve the quality of spend in government, the TAU facilitated a working visit by Dr. Joanne Kelly of the Australia and New Zealand School of Government to advise government on carrying-out expenditure reviews. The idea of instituting a comprehensive expenditure review programme was first raised in 2009 by then Dr Joanne Kelly Dr. Joanne Kelly has worked in both government and academia collaborating with practitioners and academics in Australia, Britain and the United States. She has also worked with the Privy Council Office in Canada, Her Majesty's Treasury in the UK, the General Accounting Office in Washington DC, the International Association of Supreme Auditor Offices, and the Financial Management Institute of Canada. In 2002, she directed a study that examined reallocation in twelve member-countries of the Organisation for Economic Cooperation and Development (OECD). Dr Kelly has authored reports, articles and co-authored the books “Managing Public Expenditures in Australia” and “The Art of Budgetary Control”. She is currently working on her third book, “The Politics of Budgetary Control: expenditure review and reallocation in comparative perspective.” page 15 Enabling change for development
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Review 3 final 2 - TAU - National Treasury

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