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Financial and Fiscal Commission Strategic Plan 2011/2012

Financial and Fiscal Commission Strategic Plan 2011/2012. Standing Committee on Finance May 25 2011. Mandate of the Commission. The Commission is established in terms of Section 220 of the Constitution of the Republic of South Africa Act No. 108 of 1996 as amended

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Financial and Fiscal Commission Strategic Plan 2011/2012

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  1. Financial and Fiscal CommissionStrategic Plan 2011/2012 Standing Committee on Finance May 25 2011

  2. Mandate of the Commission • The Commission is established in terms of Section 220 of the Constitution of the Republic of South Africa Act No. 108 of 1996 as amended • The Constitution provides among others that the Commission is an independent and impartial advisory institution to Parliament, provincial legislatures, organised local government and other organs of state on • The division of revenue among the three spheres of government • Any other financial and fiscal matters

  3. Enabling Legislation • The Financial and Fiscal Commission Act No. 99 of 1997 as amended • The Intergovernmental Fiscal Relations Act No. 97 of 1997 as amended • The Borrowing Powers of Provincial Government Act No. 48 of 1996 as amended • The Provincial Tax Regulation Process Act No. 53 of 2001 as amended • The Municipal Systems Act No. 32 of 2000 as amended • The Municipal Finance Management Act No. 56 of 2003 as amended • The Intergovernmental Relations Framework Act No. 13 of 2005 as amended • The Municipal Fiscal Powers and Functions Act No. 12 of 2007. • The Money Bills Amendment Procedure and Related Matters Act No 9 2009

  4. VisionTo enhance the developmental impact of public resources through the financial and fiscal system in South Africa Mission To provide proactive, expert and independent advice on promoting a sustainable and equitable IGFR system, through the formulation and collation of policy relevant analysis, in order to realise the values of the Constitution

  5. Strategic Goals: 2011/2012 The following are the major strategic goals or key focus areas of the Commission: • Providing advice and/or reporting to Parliament, provincial legislatures, organised local government and other organs of state in compliance with the Commission’s legislative mandate • Facilitating choices that would improve the Intergovernmental Fiscal Relations (IGFR) system and its development outcomes • Influencing the IGFR agenda to respond to challenges in the (global and domestic) socio-economic environment • Engaging with government, stakeholders and citizens as regards the progressive realisation of rights through public financing • Best practise management of talent (i.e. the recruitment, development, and retention of the best talent), facilities and finances to deliver • A focus on leadership and the development a positive organisational culture

  6. Strategic Objectives 2011/2012

  7. Stakeholder Engagement Strategic Objective 2011/2012 • The profiling of the Commission with a special focus on the Commission’s Mandate, Vision, Mission and Role, the Commission’s Short- and Long-Term Strategy, the Commission’s position on specific issues, the Commission’s Challenges and Achievements • The promotion, informing and influencing of grassroots, intergovernmental, legislative and intellectual discourse and thought on Commission-relevant IGFR issues • The facilitation of engagement between stakeholders (government, legislatures, interest groups, academia and citizens) on key IGFR issues

  8. Talent Management Strategic Objective 2011/2012 • The progressive and innovative management of human resources that attracts, develops and retains key talent, and leverages external expertise • Implementation of progressive talent management Strategies, Policies and Procedures • Review, innovation and continuing implementation of the Commission Recruitment Strategies, Policies and Procedures • Review, innovation and ongoing implementation of the Commission’s Remuneration Strategies, Policies and Procedures • Review, innovation and ongoing implementation of Commission’s Performance Management and Bonus Systems • Review, innovation and ongoing implementation of the Commission’s Education and Training Policies and Procedures • Partnership and collaboration with other institutions that are looking into the same issues as the Commission to exploit economies of scale

  9. ICT, and Facilities Management Strategic Objective 2011/2012 • The coordinated, coherent, high-quality, innovative and cost-effective approach to ICT that meets the needs of the Commission, the Commission Secretariat and stakeholders • The coordinated, cost-effective and innovative acquisition and management of Commission data, information and knowledge resources in support of delivery on the Commission’s mandate • The coordinated, cost-effective and innovative management of Commission assets in support of delivery on the Commission’s mandate

  10. Objectives and Functions of Research • Conduct and foster basic and applied IGFR research which positively influences developmental impact • Informed by: • Main government priorities and the fiscal framework • South Africa as a developmental state • Ensuring fiscal sustainability • Provide advice to Commission on IGFR research priorities, promotion and utilisation • Help build research capacity in IGFR for our stakeholders

  11. Research Themes and Projects 2011/12 • Equitable Growth Paths, Distribution of Public Resources and Policy Outcomes • Review of division of Revenue Bill • Review of Equitable Sharing • Large Scale Modelling for Interregional Policy Analysis in South Africa • Fiscal Decentralisation and Economic Growth • The Impact of No Fee Schools on Equity, Funding and Learner Performance • Estimating Costs of Municipal Services • Measuring Municipal Fiscal Capacity • Short Term Forecasting Model for South Africa

  12. Research Themes and Projects CONT ... • Accountable Institutions and Policy Outcomes • Evaluation of Public Transport Operating Subsidies in South Africa • An Evaluation of Sustainability and Fiscal Burden in the Current Human Settlements Delivery System in South Africa • Understanding the Dynamics of Capacity Challenges at Local Government • The Impact of Climate Change on the Agriculture Sector, Water and Food Security in Rural South Africa • Alternative Service Delivery Arrangements: The Case of SPVs • Assessing Gender Responsive Budgeting in the Local Government Sphere in South Africa

  13. Research Themes and Projects CONT ... • Accountable Institutions and Policy Outcomes Cont. • Role of IGFR in Promoting Innovation • National Government Budget Analysis • Provincial Budget Analysis • Local Government Budget Analysis • Identifying Gaps and Progress Made with Government Outcomes: A Spatial Approach • Identifying Data Gaps in the IGFR System

  14. Research Themes and Projects • Stakeholder Requests (flexible/ad hoc) • Financing of Natural Disasters • Legislation proposals with a financial and fiscal impact • Other unforeseeable referrals

  15. Stakeholders value and act upon FFC policy advice to realise the values of the Constitution Enhanced developmental impact of public resources through the financial and fiscal Enhanced developmental impact of public resources through the financial and fiscal system in South Africa system in South Africa Proactive, expert and independent advice provided on promoting a sustainable and equitable IGFR system. Quality, innovative policy-relevant research conducted Stakeholders intensively engaged on key IGFR policy decisions Domestic and international partnerships, networking and collaboration Effective packaging and dissemination of policy advice Effective and efficient secretariat support compliant with the relevant legislation Effective management of FFC research project portfolio in line with Research Strategy Human Resource management that attracts, develops and retains talent, and leverages external expertise Coordinated, cost-effective knowledge, and information management Good, responsible, ethical leadership and management Good practice corporate governance compliant with legislation Coordinated, cost effective asset management Accountable, transparent financial management

  16. Analytical information • Since establishment revenue grant grew by average of 20% with a healthy reserve ratio of 1:2. • In 2003/4 FFC experienced a 19.4% deficit over revenue and baseline was increased by 45% and maintained at inflation linked rate. • In 2006/7 FFC experienced another 14% deficit due to business growth thus resulting in erosion of reserves. All time low acid test ratio of 0.006 reported. • Business growth was evidenced by 34% increase in headcount and 13% increase in personnel costs, 40% in audit fees and steady increase of stakeholder management costs. • Acid test ratio has never recovered since, indicating technically insolvency at low level of 0.049 by end 2010/11. • Recently grant funding grew by less than 10% while OPEX remains higher than growth rate resulting in budget pressures.

  17. Way Forward • New Delivery model was adopted to reduce non-research staff complement from 34 to 26 over the medium term. • The focus will be on continuity and special skills are to be sought at a rate similar to current employment costs • Initial 47% budget increase is required to address the liquidity issue and maintain new delivery model and stabilize at 5% increase over the medium term

  18. Budget

  19. Budget cont … 13/14 11/12 12/13

  20. 10 YR Financial Position Analysis

  21. ThankYou

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